Difference between external processing & subcontracting?

[kalyana_chakravarthy2]

Dear Guru's,

Can anyone explain me the difference between external processing & subcontracting with example?

Thanks in advance

Regards

Kalyan

[Former Member]

Hi Kalyan,

For External Processing, in routing operation you need to select the control key with external processing I think it is PP02, then you need to enter a outline agreement number, while creating the outline agreement you can specify the cost per item or some UOM. based on that when you create a Production order system will generate a PR and it can be converted to a PO Cost can be seen there and you can pay the vendor by normal Invoice receipt (MIRO).

thanks,

JK

[kalyana_chakravarthy2]

Dear Guru's

Thanks a lot for your inputs. Closing the thread

Regards

Kalyan