Procurement of Subcontract Materials 
Purpose
This scenario describes the procurement and management of a material sourced from a subcontractor (external supplier performing subcontracting work such as external processing or assembly).
In subcontracting, the vendor receives materials (components) which are then used to manufacture the finished product.
"
Procurement of Subcontract Materials" describes the integrated use of the following R/3 components:SAP Component |
Functions |
Purchasing |
Create purchase requisitions, |
Warehouse Management/Inventory Management |
Placement of material into storage; manage, and valuate stocks, |
Quality Management |
Inspect quality of goods received against a purchase order |
Invoice Verification |
Post invoice and arrange payment |
Prerequisites
The relevant Quality Management process flows in this scenario are described in detail in
QM in Materials Management.Process Flow
Purchase Requisition
Procurement of subcontract materials begins with the generation of a purchase requisition:
Purchasing
If required, the vendor must have been approved by Quality Management.
Purchase requisitions to which a release strategy has been assigned must be released (approved) before they can be converted to purchase orders, contract release orders or scheduling agreement (SA) delivery schedules.
– Scheduling agreement delivery schedule
– Purchase order/contract release order
Purchase orders subject to release strategies must be released before they can be sent to the vendor.
You can monitor the stocks of components maintained on the subcontractor’s premises for the subcontracting work ordered and replenish them if they are running low.
Goods Receipt
– Quality Inspection
– Placement of the material into storage (stock putaway)
– Settlement with regard to the goods received
Invoice Verification
When the vendor’s invoice arrives, you match it with the purchase order or the goods receipt. After investigation and clarification of any discrepancies, you release the invoice for payment.
If the invoice verification process reveals any variances that the buyer needs to discuss with the vendor, you can park the invoice and continue processing it later.
Under certain circumstances, you can post an invoice as soon as you have posted the goods receipt (Evaluated Receipt Settlement). This allows you to settle goods receipts without receiving an invoice.
Storage
When the R/3 System releases the GR quantity after incoming inspection has given the all-clear, you place the goods into storage.
If the continuous inventory method is employed in your warehouse or stores, the system updates the necessary data at the time of stock putaway.