MRO Subcontracting Process

Process Flow

...

1. The service provider receives an unserviceable part for maintenance, repair, or overhaul from a customer.
2. The service provider creates a maintenance order in the system.
3. From the maintenance order, the system creates a purchase requisition for external repair and overhaul
service.
4. In the purchase requisition, the system creates an item with the subcontracting item category L for each part to
be repaired.
The system enters the material and quantity both as the item and as components for the item. Additional parts that
are provided (consumables) are entered as components.
5. The system converts the purchase requisition into a purchase order for the external repair and overhaul
service.
The individual purchase order item contains the part that is expected back after the repair service. This could be the
same part or a different one. The component level of each individual purchase requisition item or purchase order
item contains the main part to be repaired, as well as all additional materials that should be consumed during the
repair process (consumables).
6. The service provider sends the part to be repaired to the subcontractor via an outbound delivery.
The parts that are provided to the subcontractor are managed as stock provided to vendor (subcontracting stock).
The provision represents a transfer posting from unrestricted-use stock to the stock of material provided to vendor
(subcontracting stock).
7. The subcontractor repairs, exchanges, modifies, or replaces the part and returns the serviceable part to the
service provider.
For more information about the possible scenarios for returns from the subcontractor, see Subcontracting
Scenarios.
8. The service provider creates a goods receipt posting for the end product with reference to the subcontracting
item in the purchase order, and a consumption posting for the components from the subcontracting stock.
The end product can be returned to the following stock types:
Unrestricted stock
Quality inspection stock
9. The service provider:
a. Completes the maintenance order.
 b. Receives and checks the invoice related to the repair.
10. The service provider returns the now serviceable part to the customer.
...

MRO Subcontracting in Maintenance Orders

Use
You can create maintenance orders specifying operations that are carried out by a subcontractor.

You cannot use refurbishment orders such as order type PM04 in Subcontracting for MRO Processes.

Prerequisites
The External Processing field in the general view of the maintenance order is set to Externally Processed
Operation.
You can maintain the control key for this in Customizing, under Plant Maintenance and Customer Service
Maintenance and Service Processing Maintenance and Service Orders Functions and Settings for Order
Types Control Key Maintain Control Keys.
You have selected stock item category L or you have defined your own valid item category.
Only valid item categories are permitted for MROsubcontracting. Stock item category L is provided for orders with
an external operation, however you can also define your own valid item categories, which are stored in table T418,
indicator KZBSF. You can define valid item categories by selecting the Inventory Management indicator for an item
category in Customizing for Plant Maintenance and Customer Service, under Master Data in Plant Maintenance
and Customer Service Bills of Material Item Data Define Item Categories.

Features
Subcontractingindicator
Selecting the subcontracting indicator on the detail screen for external operations ensures that all components
linked to the operation are treated as subcontracting components.
Externally Processed with Subcontracting indicator
Together with the External Processing control key, selecting this indicator results in the automatic creation of a
purchase requisition for the subcontracted work.
Valid item category
Only valid item categories are permitted for MROsubcontracting. Item category L (stock item) is provided for orders
with an external operation.

Activities
When you create a maintenance order for MROsubcontracting:

In the maintenance order, you select the control key indicating external processing for one operation
On the External Processing Operation detail screen, you select Subcontr. (Subcontracting).

We recommend you enter the subcontractor, if known, in the Vendor field for the external operation. This
provides you with visibility of the subcontracting requirement in material requirements planning (MRP) for
specific vendors.
You assign components to the operation with the control key specifying external processing.
Using the material provision indicator (MPI) on the Component detail screen, you specify whether the
component is:
Rework Material to Subcontractor
Rework Material from Subcontractor
Subcontracting(Provided to the subcontractor as consumables) (Initial in the SAP standard system)
 Apart from the values Subcontracting, Rework Material to Subcontractor, and Rework Material from Subcontractor,
on component level of the maintenance order, you cannot use any other MPIs provided.

You can enter all of the above data in a task list that you can then add to each PM/CS order for
subcontracting purposes.
When you save or release the maintenance order, the system automatically creates the subcontract purchase
requisition. On operation level of the PM/CS order, you use the Res./Purc.Req. (Reservation
Relevance/Generation of Purchase Requisition) indicator to determine whether the purchase requisition is
created on releasing or saving the maintenance order, or not created at all. The purchase requisition is later
transferred into the purchase order.
If you make changes to the maintenance order on component level after creation of the purchase requisition, the
changes are reflected in that purchase requisition. However, if the purchase order has already been created, these
changes are not reflected in the purchase order.

We recommend you make changes to the maintenance order before creation of the purchase order.

MRO Subcontracting in Maintenance Orders

Use
You can create maintenance orders specifying operations that are carried out by a subcontractor.

You cannot use refurbishment orders such as order type PM04 in Subcontracting for MRO Processes.

Prerequisites
The External Processing field in the general view of the maintenance order is set to Externally Processed
Operation.
You can maintain the control key for this in Customizing, under Plant Maintenance and Customer Service
Maintenance and Service Processing Maintenance and Service Orders Functions and Settings for Order
Types Control Key Maintain Control Keys.
You have selected stock item category L or you have defined your own valid item category.
Only valid item categories are permitted for MROsubcontracting. Stock item category L is provided for orders with
an external operation, however you can also define your own valid item categories, which are stored in table T418,
indicator KZBSF. You can define valid item categories by selecting the Inventory Management indicator for an item
category in Customizing for Plant Maintenance and Customer Service, under Master Data in Plant Maintenance
and Customer Service Bills of Material Item Data Define Item Categories.

Features
Subcontractingindicator
Selecting the subcontracting indicator on the detail screen for external operations ensures that all components
linked to the operation are treated as subcontracting components.
Externally Processed with Subcontracting indicator
Together with the External Processing control key, selecting this indicator results in the automatic creation of a
purchase requisition for the subcontracted work.
Valid item category
Only valid item categories are permitted for MROsubcontracting. Item category L (stock item) is provided for orders
with an external operation.

Activities
When you create a maintenance order for MROsubcontracting:

In the maintenance order, you select the control key indicating external processing for one operation
 On the External Processing Operation detail screen, you select Subcontr. (Subcontracting).

We recommend you enter the subcontractor, if known, in the Vendor field for the external operation. This
provides you with visibility of the subcontracting requirement in material requirements planning (MRP) for
specific vendors.
You assign components to the operation with the control key specifying external processing.
Using the material provision indicator (MPI) on the Component detail screen, you specify whether the
component is:
Rework Material to Subcontractor
Rework Material from Subcontractor
Subcontracting(Provided to the subcontractor as consumables) (Initial in the SAP standard system)
Apart from the values Subcontracting, Rework Material to Subcontractor, and Rework Material from Subcontractor,
on component level of the maintenance order, you cannot use any other MPIs provided.

You can enter all of the above data in a task list that you can then add to each PM/CS order for
subcontracting purposes.
When you save or release the maintenance order, the system automatically creates the subcontract purchase
requisition. On operation level of the PM/CS order, you use the Res./Purc.Req. (Reservation
Relevance/Generation of Purchase Requisition) indicator to determine whether the purchase requisition is
created on releasing or saving the maintenance order, or not created at all. The purchase requisition is later
transferred into the purchase order.
If you make changes to the maintenance order on component level after creation of the purchase requisition, the
changes are reflected in that purchase requisition. However, if the purchase order has already been created, these
changes are not reflected in the purchase order.

We recommend you make changes to the maintenance order before creation of the purchase order.

Material Provision Indicator

Use
You use the material provision indicator (MPI) to identify the subcontracting type of a part. The following indicators are
provided:

Rework Material to Subcontractor (Value S in the SAPstandard system)

Rework Material from Subcontractor (Value X in the SAPstandard system)
Subcontracting(Provided to the subcontractor as consumables) (Initial in the SAP standard system)

Apart from the values Subcontracting, Rework Material to Subcontractor; and Rework Material from
Subcontractor, you cannot use any other MPI provided on component level of the maintenance order.

Integration
The material provision indicator is used in:

Bills of material (BOMs)

Task lists
PM/CS orders
Purchase requisitions
Purchase orders
Example
The following scenarios are possible:

Recursive repair
You send a part to the subcontractor, who returns it with the same material number:
You create the main part with MPI Rework Material to Subcontractor, possibly with consumables.
You do not have to create the returned part with MPI Rework Material from Subcontractor.
Planned material change (modification)
You send part A to the subcontractor, who returns part B. You have to create two parts in the system:
Part A with MPI Rework Material to Subcontractor
Part B with MPI Rework Material from Subcontractor
If necessary, you have to create the parts with consumables. The requirement quantity of part B should be
negative, since it neutralizes the demand that material requirements planning (MRP) creates for this part.
The following scenarios are possible for returns from the subcontractor:

Recursive repair

Same part with same material number and same serial number
Unit exchange
Different part with same material number and different serial number
Modification
Same part with different material number and same serial number
In the case of a modification, you cannot change the subcontracting type for a purchase order item from
Refurbishment with Unchanged Material Number to Refurbishment with Changed Material Number after you have
sent the part to the subcontractor.
This scenario is supported only if the original and modified materials are fully interchangeable (that is they are part
of one form-fit-function (FFF) class) or restricted interchangeable. Then you can use the unplanned material
exchange (UME) function to carry out the material exchange with the same serial number (the same serial number,
but a different material has to be posted back during the goods receipt. This is not typical for UME from a business
perspective, but it is technically possible.) For more information about UME, see Unplanned Material Exchange.

In exceptional cases where you cannot use UME, such as the modification of materials that are not
interchangeable, we recommend you do the following:
1. ...

Reverse the transfer posting to the vendor using movement type 542 in the Transfer Posting function
(transaction code MB1B) or using the Reverse Goods Movement function (transaction code VL09).
Deassign the serial number from the delivery.
Create a new purchase order item with the following details:

Field User Entry

Account Assignment Category F
Item Category L
Material <Number after modification>
Account Assignment <Order number>

Create a new delivery.

Post the transfer posting.
Replacement (unplanned material exchange)
Interchangeable part with different material number and different serial number
A subcontractor might return a different part as a replacement to the part that you originally sent. This
replacement can be fully or restricted interchangeable with the original rotable. In the Subcontracting
Monitor, you can create subitems for a subcontract purchase order for fully interchangeable and restricted
interchangeable parts.
In a replacement scenario, you can replace only fully and restricted interchangeable parts.
You can carry out UME only once for a purchase order item.
You cannot carry out UME for a manufacturer part number (MPN) subitem that has been created using the MPN
functions. For more information about MPN, see Parts Interchangeabilities.

Scenario 1:
 1. Subcontracted service a serviceable part is refurbished externally and returned subcontracting with unchanged
material no:
Recursive repair

Same part with same material number and same serial number

Note: when a PR is created from within a Maintenance order for a service with subcontracting with either changed or
unchanged material no, the item category of PR is L with the subcontracting checkbox selected in MO, so the service
item is not taken into account. To overcome this two operations with external service key may be used one with
subcontracting checked and service cost included and the other with no service costs and subcontracting indicator not
checked but parts with changed /unchanged material no incorporated.

Steps:

1.Create a maintenance order as follows:

Opeartions:

Two Operations: one having material assignment for the subcontracted material control key PM02 with external
operation with subcon indicator selectedthe material cost is updated in the order as per net PO cost (valuation strategy
in valuation variant for subcontracting).The other operation is for external service for the refurbishment job with subcon
indicator selected and no material assignment ,so that in the resultant PR two items with category L and D are generated
:

Maintain as follows:

Opeartions:
Item category for the subcontracted part should be L, as N is not possible with subcontracting.
Operation 20:

Plan cost:
Resulting PR following order release:

Resulting subcontracting type( for the subcontracting item ) is refurbishment with unchanged material no:
The PR has the same material as main item and component given to vendor in component screen for the subcontracting
item because of the material provision indicator set earlier in MO:

Create PO with reference to the PR:( The PO has the same material as main item and component given to vendor in
component screen for the subcontracting item because of the material provision indicator set earlier in MO)
Release PO:

Now accept the service through service entry sheet:

Service entry sheet saved, acceptance document 4900008083 posted

Now use subcon monitor T/code ADSUBCON to first send material to subcontractor stock and then Post GR for the
same material no:
To transfer the material to subcon stock and issue to vendor and then receive the material run ADSUBCON the subcon
monitor:

541 is performed:
This is displayed in the subcon monitor:

Now post goods receipt for the PO:

The same material (refurbishment with unchanged material no)is posted back to stock:

Check the material document:

In MMBE the stock becomes 98 again:

Maintenance order is debited with the actual cost:

The material document related to order shows:

The material document for goods movement are as follows:

The service acceptance material doc is 4900008083 which is shown order docs ,but not in MB51.

The process can be used for external refurbishment job and a split valuated ,serialized equipment can be used so that
the change in valuation is considered.
2.Case 2:

Refurbishment with changed material no:

Modification
Same part with different material number and same serial number
In the case of a modification, you cannot change the subcontracting type for a purchase order item from
Refurbishment with Unchanged Material Number to Refurbishment with Changed Material Number after you have
sent the part to the subcontractor.
This scenario is supported only if the original and modified materials are fully interchangeable (that is they are part
of one form-fit-function (FFF) class) or restricted interchangeable. Then you can use the unplanned material
exchange (UME) function to carry out the material exchange with the same serial number (the same serial number,
but a different material has to be posted back during the goods receipt. This is not typical for UME from a business
perspective, but it is technically possible.) For more information about UME, see Unplanned Material Exchange.

Unplanned Material Exchange

Purpose
An unplanned material exchange (UME) has the following scenarios:

Instead of returning the rework part that you sent to the subcontractor, the subcontractor returns a completely
different rework part with a different serial number and a different material number (possibly in accordance with an
agreement with you). The returned part is completely interchangeable with the one that was sent for repair and can
be installed in the aircraft or engine. This type of UME is handled using subcontracting type Replacement.
Alternatively, the subcontractor changes a material within the original rework part and returns the updated
part to you. This type of UME is handled using subcontracting type Refurbishment with Changed Material
Number.
To distinguish between these different scenarios, on the dialog box listing the materials that are fully or restricted
interchangeable with the one in the purchase order item, you can select the Material Change indicator for
refurbishment with a changed material number. If the indicator remains initial, you carry out a replacement.

An unplanned material exchange can occur just once for a purchase order item; you cannot create a second subitem to
exchange a rework part that has already been exchanged.

Application Log
If you carry out UME and during update of the purchase order at least one error message or important warning occurs,
an application log automatically appears. In the application log, you can see what led to the error or warning. If you
close the application log, you can reopen it using the Application Log function in the toolbar. This function is only
visible if errors or important warnings occur. Important warnings cover automatic distribution of serial numbers and
consumables during UME.

Automatic Distribution
Automatic distribution in UME can take place for serial numbers and consumables:

Automatic distribution of serial numbers

During UME, the system attempts to distribute the original serial numbers from the original purchase order item
over the selected subitems in accordance with the quantity for each selected subitem. In some cases, the system
may not be able to do this. A warning message appears in the Application Log asking you to check the distribution
of the serial numbers. You can correct the automatic distribution of the serial numbers.

In your original purchase order item, you have item A with quantity 5. In the UME, you select:
Subitem 1 for item B with quantity 3.
 Subitem 2 for item C with quantity 1.

The system distributes the first four serial numbers from the original purchase order item. The fifth serial
number is not distributed. The system raises a warning and you check the automatic distribution.
Automatic distribution of consumables
During UME, the system attempts to proportionally distribute the consumables from the original purchase order item
over the selected subitems from the UME. In some cases, the system rounds up or rounds down the quantities.
This can lead to an inconsistent quantity of consumables. A warning message appears in the Application Log
asking you to check the distribution of the consumables. You can correct the automatic distribution of the
consumables.

In your original purchase order item, you have part A with quantity 6 and consumables with quantity 7. In the
UME, you select two subitems with quantities 2 and 3 respectively. The system distributes the consumables
proportionally between these two subitems. The system distributes:
Quantity 2 to subitem 1
Quantity 4 to subitem 2.

Due to rounding in the proportional distribution, one consumable is not distributed. The system raises a
warning and you check and adjust the automatic distribution.

Prerequisites
The material of the part to be repaired and the material of the part actually received are fully or restricted
interchangeable with each other. You cannot carry out UME across different FFF classes or for materials that are not
members of an FFF class. For more information about FFF classes and interchangeability, see Parts
Interchangeabilities.

Process Flow
...

You remove the part to be repaired from the aircraft or engine and place it in stock, and you trigger the MRO
subcontracting process.
You have sent the rework part to the subcontractor with the possible consumables and expect to get the same
part back in a serviceable condition with the same material and serial numbers (subcontracting type
Refurbishment with Unchanged Material Number).
In the system, you have created the subcontract purchase order with subcontracting type Refurbishment with
Unchanged Material Number, an outbound delivery, and a transfer posting.
During the repair process, the subcontractor damaged the part or found that it could not be repaired. Instead of
returning this part, the subcontractor returns a completely different part with a different serial number and a different
material number (possibly in accordance with an agreement with you). The returned part is completely
interchangeable with the one that was sent for repair.
In the Subcontracting Monitor, you choose Material Exchange to trigger the material exchange for the selected
purchase order item.
The system displays a dialog box with a list of materials that are fully or restricted interchangeable with the one in the
purchase order item.
To select the material to substitute the original purchase order item material, you enter the quantity.
To select the type of UME, you:
Set the Material Change indicator for a refurbishment with a changed material number.
Leave the Material Change indicator initial for a replacement.
After confirming your selection, the system updates the purchase order item in the background using the
BAPI_PO_CHANGE function.
The system creates a subitem in the purchase order for the interchangeable material, using the existing manufacturer
part number (MPN) functions.
All data for the newly created subitem is copied from the main item. The old purchase order item becomes
statistical and all further activities are performed only for the newly created subitem.
After carrying out UME, you refresh the subcontracting monitor.
 The newly-created manufacturer part number (MPN) subitem appears in the tree and is used in the subsequent
goods receipt posting.

During the goods receipt posting, it is technically still possible to keep the old serial number and perform only
the material modification, however this is very unlikely, since the subcontractor returns a completely new part
with a new serial number.

Original material: circuit breaker

Changed material after refurbishment: 1713(circuit breaker1)

Create maintenance order :

Operations :

Details screen :
The component given to vendor is Disc Insulator and component to be received is 1713.It is a negative qty.

In the General view of component detail screen set material provision indicator as :

S-Rework material from vendor

X-Rework material from vendor

The price for operation is not updated from material master as it is not picked up from material master.

For second operation as usual enter a service package and a price:

However after cost calculation and release price for component is updated as price for the return material:
After the order is saved a purchase requisition is generated having two line items one service item and the other subcon
mat Disc insulator as component given to vendor in component screen and 1713 as main item for the subcon item in PR

Create the PO from PR:

Perform service entry for the service item:

Now perform transfer posting to subcon stock for Disc Insulator and GR for material 1713 using ADSUBCON:

The disc insulator is posted to subcon stock :

Material document 70000068 posted with 541 and 541 o and is related to the PO but not maintenance order:

Now perform GR for the PO:

Document 4900008086 posted

The details of material document due to goods movement only:

Order documents :
Order cost report:

Explanation for the above document generation is as below:

CASE3:

Normal subcontracting scenario to procure service

Create maintenance order with external operation PM02 :

Operation:

No component is planned in the order.

Release and save the order.

Create Purchase order manually with a/c assignment as F and item category as L-Link up with the order no.
ME2OPost to subcontracting stock
Material document posted is :

Now perform migo for the GR for subcon service (10,000-as text item and subcon parts to vendor----101 and 543)
The material document is posted :

Check that the cost of service and component issued to vendor are updated in the order and the above material docs
are linked to the order:

Material cost for the two components as per mat master rec and service cost
4.Case 4:

Forward exchange process:

Forward Exchange
Use
Service providers use the forward exchange function if they urgently need a serviceable part from the subcontractor even
though they have not yet sent the unserviceable parts to the subcontractor for repair.
The subcontractor sends a serviceable part from his own stock directly to the service provider. The unserviceable part is
sent to the subcontractor at a later point in time, who then repairs it and adds it to his own stock.
For more information, see Forward Exchange in the MRO Subcontracting Process.

Prerequisites
1. You must configure a material provision indicator for deferred delivery. In Customizing, choose Production
Basic Data Bill of Material Item Data Define Material Provision Indicator.
2. For the creation of the outbound delivery in the subcontracting monitor (transaction ADSUBCON), you must
customize the delivery type for returns. In Customizing, choose Materials Management Purchasing
Purchasing Documents Purchase Order Returns Order Returns to Vendor and assign the delivery type
RLL (return delivery to vendor) instead of the default RL (returns (purchase order)).
 1. Assign users to user parameter ADSUB_FWEX_DIRECT. The user can control if forward exchange items are
created directly in the background or if a popup appears so you can confirm that you want forward exchange
items to be created. By default the popup appears.
1. Users must have authorization for object . This object checks if a user is authorized to convert a purchase order
item to a collection of items that can be used for forward exchange in the subcontracting monitor.
2. You must adapt the Business Addin (BAdI) for goods movement type 262.

Features
1. You can monitor forward exchange using the subcontracting monitor.
1. You can start the forward exchange process in the maintenance phase in the following ways:
In the master data:
Bill of material
Task list (create with subcontracting item and maintain forward exchange information in component
overview)

You would start the forward exchange process at this point if, for example, you know that certain components
always use forward exchange.

1. Directly in the maintenance order

During purchasing, you can change purchase order items to include forward exchange information using the
Forward Exchange button in the subcontracting monitor. You would use this if, for example, there was an
aircraft-on-ground situation where a particular part is needed immediately.

1. Serialization for return items

2. Special stock and its related fields in the purchase order. This information is used during the goods movements to
post the corresponding special stocks.
1. Material provision indicator F for deferred delivery
2. Price determination procedure for forward exchange

Forward Exchange in the MRO Subcontracting Process

Forward exchange is a function within subcontracting for MRO processes. The forward exchange process can be
triggered at different stages of the subcontracting process and can be monitored in the subcontracting monitor:

Forward Exchange in Maintenance Orders

You can trigger the forward exchange process while you are creating a maintenance order.
Therefore you have to do the following:
...

In the external procurement details for the operation, set the subcontracting indicator (Subcontr.) on the External tab
page.
On the Components tab page, double-click on the item number to set the material provision indicator (MPI) to X for
the part to be received from subcontractor and F for all other parts (main component or consumables).

You can also copy components directly from a task list or bill of materials.

Forward Exchange in Purchase Requisitions

If the system creates a purchase requisition from the maintenance order, the forward exchange information is
transferred automatically to the purchase requisition. The main component X becomes the item in the purchase
requisition and all other components appear with the material provision indicator F.
The subcontracting type (SERRU) in the item is 3 (Replacement) and the item category is L (Subcontracting).

Forward Exchange in Purchase Orders

You can trigger the forward exchange process while you are creating a purchase order
In the subcontracting monitor (transaction ADSUBCON) you can:

1. Create a forward exchange purchase order from a purchase requisition created from a maintenance order by
choosing Create PO via PR.
Perform forward exchange for an existing subcontracting purchase order or a purchase order you have just created
for a normal repair (Subcontracting type 1 Refurbishment with unchanged material number).
In the subcontracting monitor, choose Forward Exch. with the quick info text Transform purchase order item into
forward exchange structure. This represents forward exchange.

You must check the following prerequisites:

1. There must be no purchase order items already containing forward exchange information.
2. There must be no follow-up documents.
3. The subcontracting type must be set to 1 or 2 on the Spec2000/SC tab page (for business function
AD_MRO_CI_3) or the Subcontracting tab page (for business function LOG_EAM_ROTSUB).
You can control if the creation of forward exchange items takes place immediately with a dialog box. This object checks if
a user is authorized to convert a purchase order item into forward exchange items.

By default the dialog box appears but you can control the appearance by making the desired setting under
System User Profile Own Data Add Parameter.

When the system creates a purchase order with forward exchange information, the subcontracting item is split into several
purchase order items. The item from the purchase requisition is deactivated and becomes statistical. The subcontracting
type (SERRU) and MPI of the statistical item of the purchase order created during forward exchange remains unchanged.
The statistical purchase order items are then visible in the subcontracting monitor in the tree hierarchy on the left with the
related subitems underneath. If you scroll to the right within this hierarchy, you can see:

1. Subitems that are forward exchange-relevant marked with

2. Components flagged for deferred delivery
3. The higher level item number
The components flagged for deferred delivery are then transferred to a return item
In the selection screen for the subcontracting monitor, you can set the forward exchange indicator so that only forward
exchange purchase orders appear in the hierarchy.
You need one item for each posting (goods issue and goods receipt). Once you have created a forward exchange
purchase order, the statistical item is grayed out and the two or more subitems are active. You can then post the goods
issue and goods receipts for the purchase orders using with the quick info text Post goods receipt for purchase order
or with the quick info text Post goods issue for purchase order.

You must use forward exchange for a complete quantity of a component, you cannot specify a partial
quantity. You can change the requirement date.

Serial Numbers
If subcontracting type 1 or 2, serial numbers already maintained in the purchase order item are copied to the return
item that is created for the main component.
See also:
Forward Exchange

Price Determination for Forward Exchange

Purpose
Forward exchange uses standard item categories. To distinguish purchasing new parts in price determination, you must
define a separate price determination procedure.
For price determination in forward exchange, we recommend you take note of the following scenarios:
Items that are not accounted in the plant maintenance order
1. Items that are accounted in the plant maintenance order
For more information about configuring these scenarios, see SAP Note 964543.

Prerequisites
1. You must define conditions
1. You must adapt the logic for price determination
For information about these prerequisites, see SAP Note 964543.

Process Flow
1. For the return items used in forward exchange, the link to the plant maintenance order must be removed in order
to get the stock update. Consequently, costs cannot be accounted because the price information cannot be
transferred to the maintenance order without this link.

Customers using special stock do not need to use this price determination procedure.
1. To ensure that cost accounting is carried out correctly for the maintenance order, the prices must be determined
in the following way:
Price of return item = material price
1. Price of goods receipt item = return items + refurbishment price/forward exchange fee from the
subcontracting info record.
If the material prices (in MM03) change after price determination in the purchase order, there is no update of the
prices in the purchase order.

The following example shows a purchase order item for goods receipt (013) and two return items (011 as the previous
main component and 012 as consumable). The main component can have the same or a different material to 013.

Item/ Material/Qty Material Refurbishment Item Price Return?

Account Price Price
Assignment
011 B/1 60 60 X
012 C/1 25 25 X
013 /F/order 1 A/1 100 32 117

With each of the following goods movements, values are posted:

1. Goods movement 101 takes place. Accounting information for item 011 is transferred to the maintenance order.
There are no stock changes.
Goods movement: 101 (goods receipt)
 Stock A = +/-0
1. Order costs/is debited: 117 (Material prices A (60)+ B (25) + Fee(32))
1. When the goods receipt arrives, goods movement 262 takes place in the background. The part from the
subcontractor is added to stock and the maintenance order costs are reduced by 100 because the value of the
part back in stock
Goods movement: 262 (return delivery for order)
Stock A = +1
Order is credited +100

1. Material B return item is sent to the subcontractor, so the stock is reduced by 1 piece and the value of stock is
reduced by 60.
Goods movement: 161 (goods return)
Stock B = -1
Material value B = -60

1. Material C return item is sent to the subcontractor, so the stock is reduced by 1 piece and the value of stock is
reduced by 25.
Goods movement 161 (goods return)
Stock C = -1
1. Material value C = -25
1. State of stock:
Stock of material B = -1
Stock of material C = -1
Stock of material A = +1
Material value +15 (because the part has been repaired and is therefore worth more)
Order is debited = 17