The client
A consumer electronics Manufacturer

The Situation
Our client uses four sub-contractors in Taiwan for production execution
Raw materials directly sent by vendor to sub-contractor & Sub-contractor directly dispatches finished    goods to customer
Taiwan office pays assembly fee to sub-contractor
Sub-contractors must be treated as production locations in SAP and yet be recognized as vendors for    assembly fee payment
Our client wanted tight control and visibility on sub-contractors’ operations

Wipro's Solution
Wipro implemented the following functionality using SAP:
MRP done at MRP Area level instead of Plant level to plan at sub-contractor level
Each sub-contractor also defined as Storage Location to enable GI and GR of materials
Use of Repetitive Manufacturing for production execution Assembly fee paid to sub-contractor through    GL Account-assigned PO Assembly fee included in material valuation through maintenance of proper
   activity Type in Rate Routing

Business benefits
Tight control on sub-contractor operations
Capacity analysis and MRP run for sub-contractors done by Taiwan
Visibility on stock information at sub-contractor locations
Possibility to monitor daily GR, GI and production of sub-contractor
Better inventory management across sub-contractors
Prevention of any misuse of SAP R/3 by sub-contractors using authorizations