The material to be produced by the vendor is to be ordered as a subcontracting item, i.e. we send the components and the vendor assembles them and sends back the material to us.
Subcontracting - Process
The subcontracting process involves the following steps:
- You order the end product using a subcontract order. The components that the vendor needs to manufacture the end product are specified in the purchase order.
- In Inventory Management, the components are posted to the stock of material provided to vendor. The components are then supplied to the vendor.
- The vendor performs its service and delivers the ordered material (the end product). The consumption of the components is posted.
- If, after the goods receipt has been posted, the vendor informs you that a larger or smaller quantity of the components was actually consumed than planned in the purchase order, you must make an adjustment.
- The vendor charges for his or her service. The invoice is posted in Invoice Verification.
Stock of Material Provided to Vendor
The quantities of the components to be provided to the vendor are entered into the stock of material to be provided to vendor.
This stock has the following features:
It is managed as part of your total valuated stock, and it is available for MRP.
It is only managed at plant level, since it is not stored at your own company but on the vendor's site.
Two stock types are possible:
- Unrestricted-use stock.
- Quality inspection stock.
Stock can be transferred between the two stock types. Withdrawals can however only be posted from unrestricted stock. You can view the stock that has been supplied to the subcontracting vendors from the Subcontracting Cockpit (transaction code: