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 Outsourced Manufacturing


Technical Data

Technical Name of Business Function


Type of Business Function

Enterprise Business Function

Available as of

SAP Enhancement Package 4 for SAP ERP 6.0

Technical Usage

Central Applications

Application Component

Materials Management - Purchasing (MM-PUR), Materials Management - Inventory Management (MM-IM), Logistics Execution - Shipping (LE-SHP), Production Planning and Control (PP)

Directly Dependent Business Function Requiring Activation in Addition

Not relevant

This business function enables you to make your subcontracting processes more transparent and more efficient. An increasing number of companies in all areas of industry shift individual production steps, or the manufacture of a product to subcontractors (service providers). This SAP solution supports all of the essential aspects of your subcontracting process. Process steps are clearly represented through the integration of SAP Supply Network Collaboration (SNC), creating one whole production scenario. This makes it easier for you to monitor your production process, and to react to unforeseen events.


If you want to integrate the SAP ERP processes Subcontracting and External Processing in SAP SNC, you must also activate the Operations, Enterprise Services (LOG_ESOA_OPS_2) and Operations, Enterprise Services (ESOA_OPS01) business functions. You must also have a licensed version of SAP SNC installed.

If you want to use enhanced batch tracking for production orders, you must activate the Work-in-Progress Batch (LOG_PP_WIP_BATCH) business function. You must also set the relevant indicator in Customizing by choosing Start of the navigation path Logistics General Next navigation step Batch Management Next navigation step WIP Batches Next navigation step Activate WIP Batch End of the navigation path.


You have installed the following components as of the version mentioned:

Type of Component


Is Needed Only for the Following Features

Software Component


SAP Enterprise Services

As of software component version SAP_APPL 604

Additional content available in other SAP applications

As of SAP SNC, Release 7.0


The following functions are provided:

Enhancements in Materials Management and Logistics Execution

The new functions in Materials Management allow you to monitor your subcontracting process in a timely manner.

Subcontracting Cockpit

You can use the Subcontracting Cockpit to maintain your subcontracting process centrally. The user-friendly interface enables you to quickly obtain an overview of the current status of your subcontracting processes. You can also access the new subcontracting functions directly.

  • You can directly check which of your components are currently in the subcontracting stock.

  • When you create a subcontracting order, you can change the shipping point for the outbound delivery, or you can change the batch number. This makes your shipping activities more flexible.

  • In the external processing scenario, you can now display additional information for each purchase order item, for example, the production order, the number of the external operation, and the operation text.

  • It is also possible to create targeted outbound deliveries for a specified purchase order item. The outbound delivery then appears in the purchase order history of the respective item.

  • The new movement types enable you to choose whether you use the two-step procedure or you send your components directly to the subcontractor.

New Movement Types for Subcontracting

The new movement types for subcontracting stock and customer consignment make it easier for you to track your components and products. Using the new stock in transfer for component provision , you can, for example, define whether your components are already at the subcontractor's site or still on the way there. In addition, you can transfer a stock order for a subcontractor from the supplying plant to the receiving plant in one step. This combines several business processes and can reduce the number of posting errors.

Scrap Report

You can use this report to gain an overview of the relationship between current subcontracting component consumption and planned consumption, and an overview of the corresponding scrap. If you do not record your scrap in the bill of material, this report provides an overview of the average scrap for a specified vendor within a specified time period.

Subcontracting Components in Inbound Deliveries

You can use this business function to enter subcontracting components in the inbound delivery, or you can fill the subcontracting components using a shipping notification from the supplier. This enables you to assign information about the batches used and the component quantities in the inbound delivery. Subsequent goods entry is booked automatically with these entries. Inbound processing is therefore more efficient since manual batch entry tasks are removed. This improves batch tracking for the sold-to party.

SNC Integration

You use SAP SNC as a common Web portal, together with your suppliers, to plan and execute replenishment and subcontracting. When you activate this business function, you can configure a data exchange between SAP ERP and SAP SNC, which enables the following:

  • When you confirm the work progress in SNC, certain information is sent automatically to the connected ERP system.

  • In ERP component consumption, for example, can be booked automatically and in a timely manner.

  • This enables you to represent you vendor's monitor component consumption exactly, and enables you to monitor the component consumption.

  • In SNC, the vendor can see whether the required components are already on the road.

  • The external operation of a production order can be confirmed automatically in SNC after the work order is closed.

  • You can use batch tracking.

Monitoring of component consumption and integration of work orders

The new concept of timely consumption enables you to book the consumption of subcontracting components separate from the goods entry. This credits the component inventory account on a timely basis. This gives you a consistent view and a correct valuation of your stock. In addition, you can also display costs for work in process for subcontracting processes in Controlling.

Stock In Transfer and Batch Tracing

For stock in transfer and batch individual stock, new fields are provided for the transfer of data from SAP ERP to SAP SNC. For information about the enhanced reports, see the SAP SNC documentation in the SAP Help Portal under Data Transfer for Contract Manufacturing: New Reports and Transfer of Demands and Stocks to SAP SNC (SMI, RP, DR).

Transfer of AMPL with CIF

You can now transfer existing data from the Approved Manufacturer Parts List (AMPL) for inventory-managed material from SAP ERP to SAP SNC using the Core Interface (CIF). You no longer need to process the AMPL data separately in SNC if you use the functions with manufacturer part numbers. Choose the relevant material and plant by selecting the AMPL checkbox in an integration model (transaction Create Integration Model (CFM1)). During CIF transfer, you can adjust the AMPL data using the CIF_ENHANCE_AMPL Business Add-In (BAdI).

Note Note

AMPL data is only transferred in one direction. You cannot transfer AMPL data from SAP SNC to SAP ERP.

End of the note.
Enhancements in Production Planning

If you implement this Business Function, you can use the following enhancements in the Production Planning area:

  • For outsourced operations in the production order, you can use the Define Purchase Requisition Header Material (PP_OM_BD_BANF_HEADER_MATERIAL) Business Add-In (BAdI). This BAdI is used to transfer the header material or corresponding reference material for the production order to the purchase requisition.

  • You can implement WIP batches for outsourced operations (see business function Work-in-Progress Batch). WIP batches allow you to have a complete batch where-used list.

  • An outsourced operation can be confirmed using the implementation of the Prepare Order Information for ERP (ICH_BIF_WO_INF_IN) BAdI.