Subcontracting
Subcontracting is a form of procurement in which the product to be procured is manufactured by a supplier (the subcontractor) to whom the procuring entity supplies components for the purpose. The procuring entity may provide these components to the subcontractor either directly (using one of its plants), or indirectly (using another of its suppliers). When the manufacturing process has been completed, the subcontractor delivers the ordered product (incorporating the components provided) to the ordering party.
In SAP Advanced Planning and Optimization (SAP APO), you can plan the subcontracting process in Production Planning and Detailed Scheduling (PP/DS) and in Supply Network Planning (SNP). You have the following options:
If the components for the finished product are to be provided by the ordering party (plant), you can plan as follows:
If the components for the finished product are to be provided by another supplier, you can plan as follows:
Capable-to-Match planning (CTM)
supports subcontracting with source location in PP/DS and in SNP, and subcontracting with third-party provision of components in PP/DS and in SNP.
Production Data Structure (PDS) Versus Production Process Model (PPM)
If you are newly implementing subcontracting with PP/DS or SNP heuristics in SAP SCM 410, we recommend using the production data structure instead of the production process model. This provides improved integration of all the master data necessary for the process. For subcontracting with the SNP optimizer, restrictions apply with regard to cost maintenance if you use the production data structure.
Prerequisites
Subcontracting with multiple production versions is supported. However, the integration with an SAP ERP system requires at least SAP ERP 2005 with Enhancement Pack 03.
Features
Constraints
In SAP APO it is not possible to change the dependent demand for subcontracting purchase requisitions.
Subcontracting in SAP APO is modeled with the help of two orders. A planned order in the subcontractor location produces the material in that location and a stock transfer requisition transfers the material from the subcontractor location to the demand location. You cannot change the transfer demand for the finished item in the subcontractor location, nor can you change the component demand in the subcontractor location.