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Materials Subcontracting for Apparel

and Footwear Industry

SAP Best Practices for Apparel and Footwear

(India)

SAP Best Practices


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Scenario Overview 1

Purpose The AFS Subcontracting process involves sending raw components to a

subcontractor, or let purchase component and let vendor directly delivery componentto subcontractor for specific manufacturing processes, and receiving the value-addedfinished material back into inventory.

Benefits BoM explosion triggers follow-on functions like delivery to subcontractor etc. Automatic posting of value flow

Automatic posting of stocks into corresponding stock types

Key process flows covered

On goods delivery, the scenario focuses on the following activities: Purchase order creation based on a scheduled purchase requisition created by last

MRP run Optional: manual purchase order creation Purchase order approval (if required) Outbound delivery

Goods issue for delivery and shipment to subcontractorOn goods receipt, the scenario focuses on the following activities: Goods receipt for purchase order delivered by subcontractor Component reservations and consumption of component quantities as provision of

material Invoice receipt by line item Invoice verification and validation of tax expenses Outgoing payment

Purpose, Benefits and Key Process Flows:


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Scenario Overview 2

Required

EHP3 for SAP ERP 6.0

Company roles involved in process flows

Sales Adiminstration

Buyer

Purchasing Manager

Warehouse Clerk

Accounts Payable Accountant

Production Planner

SAP Applications Required and Company Roles:


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Scenario Overview 3

Materials Subcontracting for Apparel and Footwear Industry

A subcontract purchase requisition is either generated via the Material Requirements

Planning (MRP) process or manually by a requestor. A buyer validates the accuracy of

the purchase requisition and converts it into a purchase order. The purchase order is

subject to approval based on predefined parameters prior to being issued to a vendor.

Component can be receipt into your own storage location or vendor can delivery to

your subcontractor inventory.

The consumption of sent components is recorded upon receipt of the value-added

finished material. The vendor sends the invoice for the services provided which is paid

during the normal payment cycle.

Detailed Process Description:


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Process Flow DiagramMaterials Subcontracting for Apparel and Footwear Industry

Sales

Administrat

ion

Pro

ducti

on

Planner

Accounts

Payable/

V

endor/

C

ustome

r

Ware-

house

Clerk

AP = Accounts Payable, COGS = Cost of Goods Sold, GR = Goods Receipt

Purchasing

Manager/Buyer

Invoice Receiptfor Two

Purchase Orders

CustomerRequest for

Material

Create SalesOrder

Display StockRequirement list

IncomingVendor Invoice

Run MRP

Create PurchaseOrder (Header)

Enter PO

ConfirmationApproval of

Purchase Order(Header)

AP

OutgoingPayment

(158)

COGS Vendor

Post GoodsReceipt direct

toSubcontractor

CreateInboundDelivery

CreateInboundDelivery

CreateOutbound

Delivery forRemain

Components

Goods Issuefor Outbound

Delivery

Post GoodsReceipt

Create PurchaseOrder

(Component)

Enter PO

ConfirmationApproval of

Purchase Order(Component)


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Legend

Symbol Description Usage

Comments

Band: Identifies a user role, such as Accounts

Payable Clerk or Sales Representative. This band

can also identify an organization unit or group,

rather than a specific role.

The other process flow symbols in this table go into

these rows. You have as many rows as required to

cover all of the roles in the scenario.

Role band

contains tasks

common to that

role.

External Events: Contains events that start or end the

scenario, or influence the course of events in the

scenario.

Flow line (solid):Line indicates the normal sequence

of steps and direction of flow in the scenario.

Flow line (dashed):Line indicates flow to infrequently-

used or conditional tasks in a scenario. Line can

also lead to documents involved in the process flow.

Connects twotasks in ascenario

process or anon-step event

Business Activity / Event:Identifies an action thateither leads into or out of the scenario, or an outsideProcess that happens during the scenario

Does notcorrespond to atask step in thedocument

Unit Process: Identifies a task that is covered in astep-by-step manner in the scenario

Corresponds toa task step inthe document

Process Reference: If the scenario references another

scenario in total, put the scenario number and namehere.

Corresponds to

a task step inthe document

Sub-Process Reference: If the scenario referencesanother scenario in part, put the scenario number,name, and the step numbers from that scenario here

Corresponds toa task step inthe document

Process Decision: Identifies a decision / branchingpoint, signifying a choice to be made by the enduser. Lines represent different choices emergingfrom different parts of the diamond.

Does notusuallycorrespond to atask step in thedocument;Reflects achoice to bemade after stepexecution

Symbol Description Usage Comments

To next / From last Diagram:Leads

to the next / previous page of theDiagram

Flow chart continues on the next /

previous page

Hardcopy / Document: Identifies aprinted document, report, or form

Does not correspond to a taskstep in a document; instead, it isused to reflect a documentgenerated by a task step; thisshape does not have any outgoingflow lines

Financial Actuals: Indicates afinancial posting document


Budget Planning: Indicates abudget planning document


Manual Process: Covers a taskthat is manually done

Does not generally correspond toa task step in a document;instead, it is used to reflect a taskthat is manually performed, suchas unloading a truck in thewarehouse, which affects theprocess flow.

Existing Version / Data: This blockcovers data that feeds in from anexternal process

Does not generally correspond toa task step in a document;instead, this shape reflects datacoming from an external source;this step does not have anyincoming flow lines

System Pass / Fail Decision: Thisblock covers an automaticdecision made by the software

Does not generally correspond toa task step in the document;instead it is used to reflect anautomatic decision by the systemthat is made after a step has beenexecuted.

External

to

SAP

BusinessActivity /

Event

Unit Process

ProcessReference

Sub-Process

Reference

Process

Decision

DiagramConnection

Hardcopy /Document

FinancialActuals

BudgetPlanning

ManualProces

s

ExistingVersion /

Data

SystemPass/F

ailDecisio

n

621 scen overview en in

Documents