Third party processing - Use of BOM?
Hi experts,
we have the following buiness process:
A customer orders an expensive machine. A sales order with one item and billing plan and item category TAS for third party processing is created.
SAP creates automatically a PR with this item copied from the referring sales order. When creating the PO we have to split this one item (machine) into its components; thus make many items out of one.
My question: Can SAP, when creating a SO for the machine, automatically create a PR that contains all components instead of the machine using BOM?
I am affraid that you must apply planned order logic or project-based approach to R/3 processing of your requirement if you want to remain R/3 standard.
In standard R/3 third-party process you carry over the material or service requirement from sales to purchasing as such without change. This applies to both fixed BOM-based materials or configurable products and results in a single item on a relevant PO.
However postponing the decision to procure externaly until the MRP run has taken place (no third-party item on sales order) allows you to decide which parts of the overall job should be procured externally. In your case this could eventually lead to the creation of multiple item PO for one machine type you sold.
This is how the standard processing has been designed. Try not to alter standard programs which convert SO item into PR. If you want to change this processing I suggest that you create a separate processing step (bespoke TCode) applicable to target PR once they are created out of the relevant third-party items of sales orders. You will have to indicate which BOM must be considered and to decide what you want to do with top level PO item (delete?) and how to price the sub-assemblies.
Another approach could be to create model-based project structure out of sales order standard item in which WBS elements include machine sub-assemblies to be procured externally.
The first standard solution has an advantage of remaining simple but with additional processing (manual) steps and resulting in longer processing cycle.
The second standard solution gives a wide range of possibilities for to-order business, whether outsourced or internal, in which you may be but requires to implement a new labor-intensive PS module of R/3.
_________________
Andrzej
akrason@excite.com
Thanks a lot Andrzej for your detailed reply!
Unfortunately we haven't neither PP nor PS implemented. We also do not use MRP as our customer is purely doing sales & marketing. They even do not have a store!
If an order goes in, then a third party sales order is created that automatically generates a purchase requisition. This process worked fine so far. Now my customer got a new supplier, who requests more detailed description Instead of just one item in the PR for the whole machine, he wants to see up to ten item for the key parts and one for service fee. Reason for this is that he sends invoices for each of these key parts.
If I understood your first solution is to manually replace the 'main' item (the whole machine) in the PR by the key parts and service fee. My customer tried to do this, but told me that he is loosing the link to the sales order. He cannot reference to each PR item to sales order item.
Unfortunately I do not have system access so can't proove this. Would very helpful if someone could confim if this is correct.
I told them already that PS can help them, but of course they do not want to implement a new module just for one vendor!
My alternative solution was to just keep one item in the PO and use the invoicing plan. Can I set up several partial payments on key dates AND add description e.g for pump1 ...
Any comments welcome!!
Now that the business context becomes more clear to me I can suggest you another approach: configurable material (machine).
If you go for product configurator (material type KMAT) you can either dynamically configure the machine while creating a sales order or select a pre-configured machine within the material master.
In bothe cases you will be able to carry over product specification i.e. the relevant product caracteristics (descriptions and values) all the way down to a third-party purchase order. It will provide the vendor with a valuable information in addition to the material number and its description (machine) which may not be explicit enough to him.
This solution involves the usage of classification (one of the so called central functions within R/3) and provides you with the opportunity to perform dynamical pricing of the product on both sales and buy side.
_________________
Andrzej
akrason@excite.com
THanks Andrzej! Are you sure that if using material configuration that the components are only shown in PR, while the SO only contains the 'main' machine?
I ever implemmented material configuration for furniture company. But there the components were shown in the SO as well. Our customer here wants the their customer only to see the main product, while only the supplier should see the details.
Is this achievable with your solution?
When you refer to components I presume you think about configuration description and not about multi-level product (machine) configurable structure which you can obtain as a result of BOM explosion in the sales order.
If this is the case, then what is disturbing about sharing the same description with the customer?
From the total qualtity management (TQM) point of view I would even say that it would be highly recommended.
If for any reason you think there is no slightest risk that one day a customer will roughly order something that the sales will understand in a certain way and the purchasing will automatically send the requirement without double check to the vendor who will have a newly hired employee process the order and select a right-sided feature for left-installed product version then you may try to play around with language versions of you caracteristic desciption.
I could imagine using a "client english" and a "vendor english" if this should happen on the same market place in order to differentiate linguistic versions of product (configurable) description.
But think twice: is it really worth it?
_________________
Andrzej
akrason@excite.com
Hi Andrzej!
Actually I agree with you. However, it is my customers requirement. The reason is that he want to sell the machine as a package and the customer shouldn't know the detail pricing of components.
I tried to convince my customer that it is not a big deal, unfortunately I ahven't been successful. Do you have any silution that complies with my requirement.
In SO just one item: machineXX
In PO automatically generated components.
It looks like BOM explosion in subcontraction, however this is a complete different procedure and can't be applied.
Or is there a way to use BOM explosion in third party ordering, when creating the PR w/o seeing the BOM components in the SO?
I am affraid that my sentence:
"When you refer to components I presume you think about configuration description and not about multi-level product (machine) configurable structure which you can obtain as a result of BOM explosion in the sales order."
was too complicated to be clear.
My proposal was to use the same single-level (configurable) item on SO and PO, to assign two different language codes to the customer and to the vendor and finally to maintain specific (caracteristic) descriptions in each language (one more detailed than the other).
This would prevent you from explosing BOM details and still be able to describe the product correctly to both partners.
Even the purchase price could be managed at feature level by applying a business-relevant structure to the product configurator.
_________________
Andrzej
akrason@excite.com