Ross Christoph ResizedWith Enhancement Pack 4 SAP provided additional functionality for processing Outsource Manufacturing or Subcontracting operations.

This includes the ability to record real time consumption of the provided material instead of only recording simultaneously with goods receipt of the produced material. Also provided is the automatic creation of a CO production order for every purchase order. This allows for the integration of subcontracting activity with production/process orders that are used for internal manufacturing in CO processing and reporting.

With a single SAP instance implementation this functionality, along with group valuation, can be utilized for enterprise wide internal subcontracting as well. A program modification is required for the creation of the cost estimate in group valuation for the company code owning the inventory - this cost estimate needs to use the manufacturing plant’s cost estimate instead of the inventory owner’s purchasing information record’s price. The recording of the group value on the inventory owner’s invoice receipt is possible with standard SAP functionality.

Learn more about my sessions at the Controlling 2015 conference.