Exploring the Subcontracting (BMY) Scenario

Objective

After completing this lesson, you will be able to execute the process steps for the Subcontracting (BMY) scenario.

Introduction

The following dialog between consultant Julia and supply chain manager Paul introduces the subcontracting process and briefly explains each step involved.

Master Data for Subcontracting

In the following video, consultant Julia and supply chain manager Paul discuss how to correctly maintain master data in the context of subcontracting in SAP S/4HANA Cloud Public Edition.

Their conversation covers key topics such as procurement types, special procurement settings, bills of material, and best practices for automating subcontracting processes.

Watch the interactive demo to learn how to check master data for subcontracting.

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Note

Using Production Versions for Multiple Bills of Material

You have the option to maintain the components in a bill of materials (BOM). This eliminates the need to manually enter the components each time you create a subcontracting purchase order, streamlining the process and reducing the risk of errors.

If you maintain multiple bills of material (BOMs) for a single assembly - such as one for in-house production and another for subcontracting - you must use production versions to manage them effectively.

Here’s how to set it up:

Create multiple production versions for the material in the MRP 4 view of the material master.
Assign the appropriate BOM to each production version, depending on its intended use (e.g., in-house vs. subcontracting).
In the subcontracting purchasing info record, specify the production version that corresponds to the subcontracting BOM.

This setup enables the system to automatically determine and explode the correct BOM during MRP and purchase order processing, ensuring accurate component planning and procurement.

Subcontracting Purchase Order

In the following dialogue, consultant Julia revisits two previously discussed subcontracting use cases with planner Jim. She explains how each scenario leads to a distinct process for creating subcontracting purchase orders in the system.

Use Case 1: Consistent Subcontracting Procurement

Watch the interactive demo to learn how to create a subcontracting purchase requisition via MRP and convert it to a subcontracting purchase order.

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Use Case 2: Occasional Subcontracting Procurement

Watch the interactive demo to learn how to manually create a subcontracting purchase order.

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Provision of Components

In the next dialogue, consultant Julia and planner Jim will introduce and discuss the provision of components to the subcontractor.

Watch the interactive demo to learn how to provide components.

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Subcontractor Stock

Subcontractor stock is considered a special stock: although it remains part of your plant’s valuated stock, it is physically located at the subcontractor’s site.

The following illustration summarizes the key characteristics of subcontractor stock.

The image represents a plant with both its own physical stock and subcontractor stock. It shows that the delivery to the subcontractor is mapped in the system as a stock transfer from the plant’s unrestricted-use stock to the unrestricted-use subcontractor special stock. The main characteristics of subcontractor stock are: Physically located at the supplier’s premises, Still part of the plant’s valuated stock, Visible in the system at the plant level, Available in both unrestricted-use and quality inspection stock

Goods Receipt from Subcontractor

Now, let’s listen to Julia as she introduces the goods receipt process for a subcontracting purchase order.

Watch the interactive demo to learn how to post a goods receipt with reference to a subcontracting purchase order.

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Subsequent Adjustments

Listen to Julia as she introduces the Post Subsequent Adjustments app in the following short dialogue.

Watch the interactive demo to learn how to post subsequent adjustments.

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