Introducing Subcontracting (BMY)

1. Navigate to SAP Best Practices for SAP S/4HANA Cloud, public edition for Enterprise Management.
2. Select a country localization from the Version dropdown list.
3. If necessary, select the Login icon in the upper left corner to log in.
4. Go to the Accelerators section and, under General Documents, select the link SAP Best Practices content library.
5. Select the relevant scope option checkboxes to filter information and locate scope item test scripts and process flows.

Note

Ignore the BPMN2 version of process flows.

Subcontracting is the process in which a material you procure from a vendor (subcontractor) requires certain components. These components are either provided by you to the subcontractor or you order the components from a third party vendor who delivers them directly to the subcontractor.

You can raise a purchase requisition to request the material that the subcontractor is to manufacture.

You can order the material through a purchase order or scheduling agreement item using the Subcontracting (L) item category. The Subcontracting (L) item category enables you to create sub-items covering the components to be provided to the subcontractor. You can either manually enter the individual components or generate them through a bill of materials explosion, if a bill of materials exists for the ordered material. The material to be ordered does not require a material master record. On the other hand, components that are provided must have a material master record.

Components provided to the subcontractor are part of your valuated inventory. They are displayed under the special stock category "stock of material provided to vendor".

When the subcontractor has performed his work, he delivers ordered material. You enter the goods receipt with reference to the subcontracting purchase order or scheduling agreement. Not only is the receipt of the finished products being booked, but also the consumption of the components from the special stock "material provided to vendor".

Finally, the subcontractor invoices the service rendered.

Note

The subcontracting process should not be confused with external processing: in external processing, an account assigned purchase requisition is generated by a production order. This purchase requisition does not contain any components, only the description of the operation to be performed externally.

• Create subcontracting purchase requisition (optional)
• Create subcontracting purchase order
• Approve subcontracting purchase order (optional)
• Monitor subcontracting purchase orders
• Monitor the stock /requirements situation of the components at the supplier
• Create outbound delivery (for components)
• Pick and post goods issue (for components)
• Post goods receipt from subcontractor
• Post supplier invoice

• Streamline subcontracting processes efficiently and cost-effectively
• Ensure highly automated processes for subcontracting
• Reduce manual efforts greatly
• Monitor the process progress in real time