Third Party Order Processing

Third party order processing is as follows: 
  
Assume three companies X, Y and Z 
X - The company, 
y - The customer 
Z - Vendor 
  
When ever X gets a PO from Y to supply some goods, X has an option of either manufacturing those goods or procuring those goods.

If he is procuring the goods, there are two methods that are generally followed: 
  
Method 1) After receiving the PO from Y, X creates a sales order against Y. 
Now at the same time he also creates a PO to a vendor Z to produce the goods 
Z produces the goods and supplies to X 
X receives the goods from Z 
Then X delivers the same goods to Y. 
After that X invoices Y and Z invoices X. 
  
Note : Here there is no direct/ Indirect relation between Z and Y. 
  
This process is known as Trading Process. and the Material here is created  with Material type HAWA. 
  
The other method is a Third party order processing method: 
  
Here the glaring difference is that instead of Z supplying the material to X and X in turn supplying the same material to Y. 
  
X authorizes Z to supply the material to Y on his behalf and notify him once the delivery is complete. 
  
Now Z supplies the material to Y and acknowledges the same to X. 
  
Z  will send a copy of delivery acknowledgement and invoice to X. 
  
After receiving the delivery confirmation and invoice from Z, X has to verify the invoice and this process is known as invoice verification and is done in SAP through Tcode MIRO. 
  
The next step for X  is to create an invoice and submit to Y 
  
Only after the invoice verification document is posted  then only X can create an invoice for Y. 
  
This is the business flow that is followed for third party order configuration. 
  
There are few steps that have to be configured to enable the system to function as mentioned above. 
  
Step1) 
If you are always followwing a third party process for a material then you have to create the material using item category group BANS. 
  
The procument type should be marked as External procurement (F) in MRP 2 view of the material master record. 
  
if you are not always allowing third party order processing then u can create a material master record with item category group as NORM and the procurement type should be marked as ( X) meaning both types of procurment ( in house manufacturing and external procurement). 
  
step 2) 
the item category in the order should be manually changed as TAS. 
For that you need to confugure the item category determination 
  
ord type + item cat grp + usge + Hiv level = Item cat + Manual item cat 
  
OR + NORM +      +       = TAN . + TAS 
OR + BANS +       +       = TAS 
  
Step 3) 
make sure that during the item category configuration for TAS  you need to mark relevnat for billing indicator as F 
  
step 4) 
The schedule line cateogry for this type should be CS. 
make sure that you mark  subsequent type as NB - purchase requisition  in this schedule line category as this will trigger the purchase requision order immediately after the creation of the sales order and the PO to vendor is created against this purchase requiesion. 
  

An Example Of Third Party Sales

Scenario: 
2 companies are created in system - India & Singapore Customer places sales order for particular material on Singapore.  Singapore is not able to produce the same. They pass on the order to India for processing.  After processing India ships the material directly to the customer along with necessary documentation.  Invoice copy is passed on to Singapore.  Final Commercial Invoice will be raised by Singapore.  How can the above scenario handled? 

By: Balaji

You can do this using third party sales. 
    
The third party sales process is as under. 
    
1) Singapore company creates an order for the singapore customer. 
    
2) Because of the configuration settings of the sales document type, item category & schedule line category, as soon as the order is saved a PR (purchase requisition) is automatically generated. This is converted into PO (purchase order) and sent to the indan company. 
    
3) Indian company supplies the material directly to the singapore customer. 
    
4) Indian company sends the invoice to the singapore company. 
    
5) Singapore company does the invoice verification in MM using tcode MIRO. 
    
6) Singapore company raises the invoice to the singapore customer. 
    
In standard SAP, item category TAS is used for this. The schedule line category is CS. Here you can see a field 'order type' with value 'NB'. This triggers the automatic creation of the PR. 
    
Plus in the material master also you need to do certain settings.

1) If you are always following a third party process for a material then you have to create the material using item category group BANS. The procurement type should be marked as external procurement (F) in MRP 2 view of the material master record. 
    
2) If you are not always allowing third party order processing then you can create a material master record with item category group as NORM and the procurement type should be marked as (X) meaning both types of procurement (in house manufacturing and external procurement). 
      
In the item category the billing relevance should be 'F'.

Cross Selling : How To Configure

(1) Cross Selling: How to configure and the menu path details. 
(2) While creating individual order I face one error 'Plant not assigned to Controlling Area':  How to configure controlling area and menu path. 
(3) Menu of path of subsequent Delivery Free of Charge.

By : Ahmednsp

Cross selling is a concept by which the business can improve the sales. By using this concept the business can offer combination material for ordered material.

Ex: If the customer placed for the order for computer then computer stand can be suggested as a combination material. It can be mapped by using cross selling concept that uses condition technique.

When the user raises the sales order and specifies ordered material then system automatically pup-up a box in which system displays suggested material

Configuration settings:

1) Define determination procedure for cross selling: 
Path: 
- IMG 
- SD 
- Basic function 
- Cross selling 
- Define determination procedure for cross selling

a) Create condition table: 
Here we define condition table ex:  - material

b) Maintain access sequence: 
Here we define access sequence ex: C001 and assign condition table ex:011 that we define in previous step.

c) Define condition type: 
Here we define condition type C001 and assign it to access sequence C001 that we define in previous step.

d) Maintain procedure: 
Go to new entries and define cross selling profile Ex: CS0001 and assign our condition  type C001 that we define in  
the previous step.

2) Maintain customer/document procedures for cross selling: 
a) Define customer procedure for cross selling: 
Here we define customer cross selling profile Ex: "B" --  cross selling

b) Define documents procedure for cross selling: 
Here we define document cross selling procedure ex: `B"- cross selling

c) Assign document procedure for cross selling to sales document: 
Choose sales document type "OR" and assign document cross selling procedure ex: "B"

3) Define and assign cross selling profile:

a) Define cross selling profile: 
Go to new entries, specify cross selling profile key with description 
- Specify cross selling pricing procedure (CS0001) 
- Assign the pricing procedure (RVA001) 
- Specify cross selling dialog box indicator W 
If it is "A" – dialog box appears only in request. 
It is blank – dialog box appears in request and after date is released

Check cross selling ATP indicator: If you check it , system carry out ATP check for cross selling product.

b) Assign cross selling profile: 
- Go to new entries, specify sales area 
- Specify customer cross selling procedure –B 
- Specify document cross selling procedure – B 
- Assign cross selling profile -- CS0001

Maintain condition record for cross selling (VB41): 
Path: 
- Logistics 
- SD 
- Master data 
- Products 
- Cross selling 
- VB41

Specify condition type C001 
Specify the order material, select condition line item 
Click on alternative material icon and maintain alternative material with cross selling delivery conditions options

Blank – Out bond delivery takes place regardless of main item 
"A"     -- Out bond delivery only if main item has been partially delivered

Go to VD02, sales area section of sales tab 
Assign customer procedure for product proposal - B 
Save it and exit

Go to VA01; raise the sales order with order material check the effect.

4) Path to created controlling area: 
Img-->Ent Str-->Defintio-->Controlling-->Maintain Controlling Area , here you can create controlling area

Process Flow for 3rd Party Sales

Customize the third party sales in summary:

 1. Create Vendor XK01

 2. Create Material – Material Type as "Trading Goods". Item category group as "BANS".

 3. Assign Item Category TAS to Order type that you are going to use.

 4. A sale order is created and when saved a PR is generated at the background 

 5. With reference to SO a PO is created (ME21N). The company raises PO to the vendor.

 6. Vendor delivers the goods and raises bill to company. MM receives the invoice MIRO 

 7. Goods receipt MIGO 

 8. Goods issue

 9. The item cat TAS or Schedule line cat CS is not relevant for delivery which is evident from the config and,   therefore, there is no delivery process attached in the whole process of Third party sales.

10. Billing      *-- Seema Dhar 
 

SD -  3rd party sales order Create Sales Order 
VA01 
      Order Type 
      Sales org, distr chnl, div 
      Enter 
      Sold to 
      PO # 
      Material 
      Quantity 
      Enter 
      Save

SD -  3rd party sales order View the PR that is created with a third party sales order 
VA01 
      Order Number 
      Goto Item Overview 
      Item ->Schedule Item

SD -  3rd party sales order View the PR that is created 
ME52N 
      Key in the PR number 
      Save

SD -  3rd party sales order Assign the PR to the vendor and create PO 
ME57 
      Key in the PR number 
      Toggle the "Assigned Purchase Requisition" 
      Execute 
      Check the box next to the material 
      Assign Automatically button 
      Click on "Assignments" button 
      Click on "Process assignment" 
      The "Process Assignment Create PO" box , enter 
      Drag the PR and drop in the shopping basket 
      Save

SD -  3rd party sales order Receive Goods 
MIGO_GR 
      PO Number 
      DN Number 
      Batch tab , click on classification 
      Serial Numbers tab 
      Date of Production 
      Flag Item OK 
      Check, just in case 
      Post 
      Save

SD -  3rd party sales order Create Invoice 
MIRO 
      Invoice Date 
      Look for the PO , state the vendor and the Material 
      Check the box 
      Clilck on "Copy" 
      Purchase Order Number (bottom half of the screen) 
      Amount 
      State the baseline date 
      Simulate & Post 
      Invoice Number 
      *Invoice blocked due to date variance

SD -  3rd party sales order Create a delivery order 
VL01N 
      In the order screen , go to the menu Sales Document , select "Deliver" 
      Go to "picking" tab 
      State the qty and save

SD -  3rd party sales order Create a billing document 
VF01 
      Ensure that the delivery document is correct in the 
      Enter 
      Go to edit -> Log 
      Save