Subcontracting in MTO with a purchase order or a service order?

[AAkash1]

Hi All,

I have a scenario in which we have a

1. Sales order > Production order  with 2 operations.
2. Operation 1 is happening in-house 
3. Operation 2 (Semi-finished) material is sent to subcontractor for operation 
4. Once operation is completed, material is sent back to us .

In Step 3, for sending a material to subcontractor, we have an external operation. Here we create a purchase requisition, which should be converted to a service or a purchase order? and in process subcontractor will receive a semi-finished material from us and consume it create a finished material, where that consumption and goods receipt is happening when it comes to SAP document? 

please help me to understand a standard process.

[RAHEEL_BABAR]

Hi,

Please see here end to end process.

Subcontracting process in Production 

Regards

[AAkash1]

thanks, just to be sure. We need a purchase order or a service order?