Outsourced Manufacturing (249)

1. Outsourced Manufacturing (249) SAP Best Practices

2. Purpose and Benefits • Purpose • Outsourced manufacturing enhances the typical subcontracting and external processing processes with advanced features. • Benefits • Serial Numbers Assignment in Procurement • Subcontracting ASN with serial numbers • Monitoring of whole process with subcontracting process • Material numbers can be transferred to purchase orders • Usage of subcontracting stock-in-transfer • In-time consumption posting of components • Inventory Reports

3. Required SAP Applications and Company Roles • Required SAP Applications • SAP enhancement package 6 for SAP ERP 6.0 • Company Roles • Strategic Planner • Production Planner • Production Supervisor • Warehouse Clerk • Shop Floor Specialist • Engineering Specialist

4. Key Process Steps • Key process steps covered in Subcontracting • The scenario focuses on the enhanced functions in Subcontracting and External Processing: • Subcontracting (MM) : • Purchase order processing with Serial Numbers Assignment • Outbound delivery of components via Subcontracting Cockpit • Goods issue for delivery and shipment to subcontractor (Stock-in-Transfer) • Posting in time-consumption of components • Shipping notification (ASN) from Subcontractor with serial numbers • Goods receipt for delivery by subcontractor via ASN • Subcontracting (PP) : • Transfer of the material for the production order to the purchase requisition • Outbound delivery of components via Subcontracting Cockpit • Posting in time-consumption of components • Component consumption history

5. Process Flow Diagram Subcontracting (MM) with serial numbers Purchasing Administrator Initial Requirement Situation Execute MRP Purchasing Administrator Create Subcontract PO Assign Purchase Requisition and Create Purchase Order Purch. Manager Monitoring with Subcontracting Cockpit Approve Purchase Orders Assign serial number to Purchase Orders Warehouse Clerk& Maintenance Employee Create Outbound Delivery Request Pick Confirmation Generate Transfer Order (Optional) Confirm Transfer Order (Optional) Post Goods Issue Stock in Transfer: Receive components at Subcontractor Inventory Reports: Consumption,Scrap, WIP Posting In-time Consumption of components Monitoring with Subcontracting Cockpit Create Subcontractor ASN with serial number Post Goods Receipt for ASN Maintain Stock Information for Serial Numbers Accounts Payable Account. Invoice Receipt from Subcontracting BO Review Invoice Receipt from Subcontracting BO Post Outgoing Payment MRP = Material Requirements Planning, PO = Purchase Order, GR/IR = Goods Receipt/Invoice Receipt, PPV = Purchase Price Variance

6. Process Flow Diagram Production Subcontracting (External Processing) with Batch components Vendor Vendor Receives Material and Performs External Services Perform External Services Ship External Material Back to Plant Incoming Vendor Invoice Event Production Order Generates Purchase Requisition for External Services Prod.Planner / Shopfloor Specialist Releasing Finished Goods Orders Picking Components & Consumption of Component with Serial Numbers Confirming Assembly Activities Completion Confirmation of Production Order Material Staging for Finished Goods Production PurchasingAdministrator Create PO with MaterialN° from Purchase Req (Vendor assigned by Info record) Print Purchase Order Monitoring with Subcon-tracting Cockpit Warehouse Clerk Subcontract Services GR/IR Posting In-time Consumption of components Inventory Reports: Consumption,Scrap, WIP Ship Material to Vendor Goods Receipt for Subcontracting PO Deliver Material Back to Shop Floor Accounts Payable Accountant Periodic Payment: Accounts Payable (158) Invoice Receipt GR/IR PPV Vendor PP = Production Planning,RFQ = Request for Quotation, PO = Purchase Order, GR/IR = Goods Receipt/Invoice Receipt, PPV = Purchase Price Variance

7. Diagram Connection Legend <Function> Hardcopy / Document External to SAP Financial Actuals Business Activity / Event Budget Planning Unit Process Manual Process Process Reference Existing Version / Data Sub-Process Reference Process Decision System Pass/Fail Decision