service PO or a normal PO for a subcontracting in SAP MTO

[AAkash1]

Hi All,

In standard MTO we have a production order with an external operation to send the semi-finished material to a subcontrator, from the system point of view, in production order external operation, a purchase requisition will be generated. Here do we need a service purchase order or a normal purchase order? 

As a subcontractor will received a semi-finished material , perform a service and convert that to a finished material. 

Please suggest, shall we go with a service Po or a normal PO? 

As once operations / service is completed by the subcontractor, we will receive back the stock in our WH for packing etc. 

[DerekDing]

For the Operation Subcontracting usually should maintain the specified “Control Key （ex. PP02）”, and it will create a PR automatically when the production order created. And then you can transfer the PR to PO, and the price in PO will record the subcontracting cost, the cost will be recorded into the production order when did GR of PO.

According to your question, “Please suggest, shall we go with a service Po or a normal PO? ", I think you can just use the normal PO.

BTW, you can also create a material to do the subcontracting process, you can set "F 30" for the material and do the following purchasing subcontracting process. 

[PradeepKumarR1]

Since your are sending semi finished material to subcontractor, please use subcontracting tick on operation overview, the purchase req / Purchase order will have BOM item as semifinished Material, with Normal PO with F account assignment category