hi,
sub contracting is a pure MM process where a material is given to a vendor for getting it processed/manufactured/repaired etc.
also just go through the notes on subcontracting :
In subcontract order processing, the vendor receives materials (components) with which it produces the end product. The following are involved:
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.
regards
sadhu kishore
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