Exploring the Subcontracting Process

You enter a scrap posting if it is not possible to use a material any longer, for example, because it has been damaged or because its minimum shelf life has been exceeded. Scrapping is possible from each of the three stock types and is entered as a GI without a reference.

The following movement types are defined for scrapping:

• 551: Withdrawal for scrapping from unrestricted-use stock
• 553: Withdrawal for scrapping from stock in quality inspection
• 555: Withdrawal for scrapping from blocked stock

Scrapping causes a reduction in the associated stock. The system moves the value of the scrapped material from the stock account to a scrap account.

• Subcontracting process overview: Components are provided to vendors or ordered from third parties to manufacture or refurbish materials.
• Ordering materials: Use purchase orders with item category L, manually enter components, or automate using bill of materials explosion.
• Inventory management: Post components to "stock of material provided" and clear upon goods receipt of finished product.
• Master data requirements: Set a subcontracting type in material master record, ensure sources of supply, and integrate BOMs for automatic component determination.