S/4HANA Subcontracting with MRP Area

In subcontracting, the vendor is provided with materials (components), which he uses to produce the finished product. From the point of view of materials planning, subcontracting is initiated by the special procurement key Subcontracting.
The special procurement key is allocated to the finished product or the assembly in the material master ( MRP 2 view).
In order to plan specific material requirements for each individual subcontractor, you can use MRP areas. You can thereby create an individual MRP area for every subcontractor

Main differences between S/4HANA and ECC.

ECC – with vendor segment

S/4HANA – without vendor segment

If you do not use MRP areas for components to be provided to the subcontractor, there is no separation of provision stocks and subcontracting requirements. The system displays the provision stocks and requirements to be provided as usual stocks and requirements in the net requirements segment of the plant. The provision stock that is already available for a subcontractor (supplier) will be considered as unrestricted-use stock in the plant. The system uses this stock to cover all requirements inside the net requirements segment, not only the requirements for components to be provided to the subcontractor (supplier).

S/4HANA subcontracting process redefined with flexible functionality. In SAP S/4HANA MRP uses default planning parameters if MRP-area-specific material master records do not exist. You only have to create an MRP area for every subcontractor. Of course, it is still possible to create MRP area/supplier-specific material master data if required.

This simplification has the following advantages:

• Separate planning of every subcontractor is possible without having to create an MRP-area-specific material master record.
• The planning logic is simplified. There are two rather than three different ways to plan parts to be provided to a subcontractor.

The default way of planning parts to be provided to subcontractors is based on MRP areas. A subcontracting MRP area should be created for every subcontractor. It is not required to create an MRP-area-specific material master record for every part to be provided to the subcontractor, but of course, it is possible if you want to overrule the default planning parameters.

If you have several subcontractors requiring the same component materials and if you do not yet use MRP areas to plan the required components then proceed as follows:

• Create MRP areas for every subcontractor (can be done before or after upgrade)
• Run regenerative MRP after the upgrade

Subcontractor MRP area configuration

You can follow SAP navigation path or transaction code OMIZ directly to configure MRP areas.
Click on New Entries and create MRP area as below.

After maintenance of MRP area click on double click on Subcontractor (one entry per MRP area) and maintain the vendor details as below.

Components Planning with Subcontracting Process

Master Data MRP Area

MRP area called SUB_001 available to plan separately associated components. SAP suggested maintaining the MRP area parameters to all components which are planned under the MRP area in MRP 1 view (Material R-100-101).

Click on MRP areas and maintain the MRP parameters as like plant parameters.

It is important to maintain MRP 2 special procurement to 45 – Stock transfer from plant to MRP area.

Make a note that you need to adopt data while entering MRP area parameters and save material.

Subcontracting Process Execution

Demand Flow

Forecast updated for subcontracting header material called F-100-101.

MRP Live

After forecast updated runs MRP live.

Based on MRP live log total of 4 materials planned 1 material with classic MRP and another 3 with MRP on HANA.

Analyzing MRP results

After MRP run completed purchase requisitions created for header article based on planning horizon.

Now go to component R-100-101 and analyze the result at a plant level and MRP area level.
Plant level – Stock transfer reservations from the plant to the provision stock of the subcontractor.

MRP area level – Procure the components that you provide to a subcontractor for the production of an assembly, by transferring stock from a plant to the MRP area of the subcontractor.

Mass maintenance

Mass processing reports RMMDDIBE and RMMDDIBE02 can be used for maintenance of MRP areas.

Additional references:

https://launchpad.support.sap.com/#/notes/2586059
https://launchpad.support.sap.com/#/notes/2227532
https://launchpad.support.sap.com/#/notes/2268044
https://launchpad.support.sap.com/#/notes/2516504
https://help.sap.com/viewer/fe39e10a9a864a8f8dc9537704f0fa13/1709%20000/en-US/60adce5314894208e10000000a174cb4.html
https://blogs.sap.com/2017/10/19/5-reasons-to-use-subcontracting-mrp-areas-in-s4hana./
Best Regards,
Lingaiah

Source: https://blogs.sap.com/2019/03/19/s4hana-subcontracting-with-mrp-area/