Chapter 1: The Foundation - Master Data
Before you can execute any process, the correct master data must be in place. This is the bedrock of the subcontracting process in SAP.
1.1 Material Master
You need at least two types of materials: the finished product you receive from the subcontractor and the components you provide to them.
- Finished Product (e.g., PH-K1000, "PharmaCo Drug Kit, Assembled")
- MRP 2 View: In the Procurement section, set the Special Procurement key to 30 (Subcontracting). This tells the system that this material is procured via a subcontracting process when a requirement is generated by the planning run (MRP).
- Purchasing View: Ensure the "Purchasing" view is maintained for the relevant plant.
- Fiori App: Manage Product Master Data (App ID F1602)
- Key Views & Fields:
- Component Materials (e.g., PH-C100, "Drug Vial"; PH-C200, "Packaging Box")
- These are standard materials that will be provisioned. Ensure they have Basic Data, Purchasing, and Plant/Storage Location views maintained. They are managed as regular inventory items.
- Fiori App: Manage Product Master Data (App ID F1602)
- Key Views & Fields:
1.2 Bill of Materials (BOM)
The BOM lists all the components and their quantities required to produce the finished product. SAP uses this to automatically determine which components to provide to the subcontractor.
- Fiori App: Maintain Bill of Material (App ID F2260) / SAP GUI: CS01
- How-To:
- Enter the Material number of the finished product (e.g., PH-K1000).
- Enter the Plant and a BOM Usage of 1 (Production).
- On the next screen, list each Component (e.g., PH-C100, PH-C200) and the required Quantity.
- Save the BOM.
When a subcontracting purchase order is created for the finished product, the system will automatically read this BOM to populate the list of components to be provided1.
1.3 Purchasing Info Record
The info record stores the specific relationship between a material, a supplier, and a plant for purchasing. For subcontracting, it holds the price the supplier charges for their service.
- Fiori App: Manage Purchasing Info Records (App ID F1999) / SAP GUI: ME11
- How-To:
- Enter the Supplier and the Material number of the finished product (e.g., PH-K1000).
- Select the Subcontracting info category.
- In the Purchasing Org. Data 1 tab, enter the subcontractor's service Price. This is not the price of the material, but the price for the assembly or sorting service. 2
- Save the Info Record.
1.4 Business Partner (Supplier)
The subcontractor must exist in the system as a Business Partner with a Supplier role.
- Fiori App: Manage Business Partner Master Data (App ID F3163)
- How-To: Ensure the subcontractor is created with a Supplier role and extended to the relevant Company Code (for invoicing) and Purchasing Organization (for ordering).
Chapter 2: The End-to-End Subcontracting Process Flow
This chapter details the step-by-step operational flow, from identifying a need to paying the subcontractor.
Step 1: Create the Subcontracting Purchase Order (PO)
The process begins with a formal order to the subcontractor. This can be created manually or automatically from a purchase requisition generated by an MRP run.
- Fiori App: Manage Purchase Orders (App ID F0842A) / SAP GUI: ME21N
- How-To:
- Create a new Purchase Order using the standard
Order Type 'NB'3.
- Enter the Supplier and other header details.
- In the item overview, enter the Material number of the finished product (e.g., PH-K1000).
- Crucially, set the
Item Category to L (Subcontracting)4.
- Enter the required Quantity and Delivery Date.
- Navigate to the "Material Data" tab at the item detail level. Click the "Components" or "BOM Explosion" button. The system will automatically populate the components and quantities from the BOM you created earlier. 5
- Save the Purchase Order.
Step 2: Provide Components to the Subcontractor
You must physically send the components to the subcontractor. In SAP, this is recorded as a transfer posting, not a sale. The components remain your company's property6.
- Fiori App: Monitor Subcontracting Documents (App ID F2356) / SAP GUI: ME2O
- How-To (Monitoring):
- Use the Monitor Subcontracting Documents app to see which components are due to be sent to which suppliers. This gives you a clear overview of requirements.
- How-To (Posting the Goods Issue):
- From the monitoring report, select the components you are shipping.
- Click "Post Goods Issue".
- The system will propose the movement. The standard movement type is 541, which transfers stock from your plant's unrestricted-use stock to the special "Stock Provided to Vendor." This transfer is a logistical movement and has no financial impact at this stage.
- This step can be performed using handheld RF scanners in a warehouse environment (as referenced by "lecteurs HF" 7), which would typically call a simplified transaction that posts the 541 movement in the background.
- Checking the Stock: You can view this special stock segment using the Stock - Single Material Fiori app (App ID F1595) or MMBE in the GUI. The stock will appear under a line item called "Stck w. Subcontr." (Stock with Subcontractor). This stock is still valuated as part of your inventory. 8
Step 3: Receive the Finished Product from the Subcontractor
Once the subcontractor completes their work (e.g., assembly), they ship the finished product back to you. You record this as a Goods Receipt (GR).
- Fiori App: Post Goods Receipt for Purchasing Document (App ID F0843) / SAP GUI: MIGO
- How-To:
- Select Goods Receipt against a Purchase Order.
- Enter the Subcontracting PO number.
- The system will display the finished product. Enter the Quantity received.
- If the components were batch-managed, you
must specify which batches and quantities of components were consumed by the subcontractor to produce the finished goods9. This information should be provided by the supplier on their delivery note.
- Post the Goods Receipt.
- Behind the Scenes (Automatic Postings): When you post the GR, SAP automatically performs two movements:
- Movement Type 101 (+): Receipt of the finished product into your inventory. This increases the stock of the finished good.
- Movement Type 543 (-): Consumption of the components from the "Stock Provided to Vendor." This decreases the component stock at the supplier. This is known as backflushing. 10
Step 4: Invoice Verification
The final step is to receive and post the invoice from the subcontractor for their service fee.
- Fiori App: Create Supplier Invoice (App ID F0859) / SAP GUI: MIRO
- How-To:
- Enter the invoice details (date, amount, etc.).
- Reference the Subcontracting Purchase Order.
- The system will propose the amount based on the service price in the PO and the quantity received.
- Verify the details and post the invoice. This creates a payable to the supplier.
Chapter 3: Special Scenario - Subcontracting for Rework/Sorting
Sometimes, you need to send a product to a subcontractor not for assembly, but for a rework or sorting activity. For example, a batch of finished product failed inspection and needs to be sorted to separate the good items from the bad.
In this scenario, the "finished product" you receive back is essentially the same item you sent as a "component."
Process Steps for Rework:
The process is nearly identical to standard subcontracting, with one key difference in the Purchase Order creation.
- Create the Rework PO:
- PO Item: Material PH-K1000, Quantity 95.
- PO Component: Material PH-K1000, Quantity 100.
- Use Item Category 'L' as usual.
- The material number you enter in the item line will be the material being reworked (e.g., PH-K1000).
- Navigate to the Components tab.
- SAP might try to explode a BOM. You must manually adjust this. Delete any components that are not relevant.
- Add the same material number (PH-K1000) as a component. The quantity of the component will be the number of units you are sending for sorting. 11
- Example: You are sending 100 units of PH-K1000 for sorting, and you expect to receive 95 good units back.
- Provide "Component" for Rework: Post a Goods Issue (Movement Type 541) to send the 100 units of PH-K1000 to the subcontractor's stock.
- Receive Reworked Product: Post a Goods Receipt (Movement Type 101) for the 95 good units of PH-K1000. The system will automatically consume the 100 units from the subcontractor stock (Movement Type 543). The 5 "lost" units are effectively scrapped during consumption.
- Invoice Verification: Pay the supplier for the sorting service.
Chapter 4: Integration with Other Modules
Subcontracting is not an isolated process. It integrates tightly with other SAP S/4HANA modules.
- Warehouse Management (EWM):
- When you post the 541 Goods Issue, EWM creates an Outbound Delivery Order to pick and stage the components.
- The GR (101 movement) triggers an Inbound Delivery in EWM, which is then used for putaway of the finished goods into the warehouse.
- Quality Management (QM):
- You can activate a QM inspection for the finished product. When the GR is posted, the system automatically creates an inspection lot. The stock is posted to "Quality Inspection" stock until a usage decision is made.
- Finance & Controlling (FI/CO):
- Debit: Finished Good Inventory Account (for the value of the components + service cost).
- Credit: Component Inventory Account (for the value of components consumed).
- Credit: GR/IR (Goods Receipt/Invoice Receipt) Clearing Account (for the subcontracting service cost).
- Debit: GR/IR Clearing Account.
- Credit: Vendor Payables Account.
- Component GI (541): No accounting document. It's a logistical transfer within the same company's valuated stock.
- Finished Good GR (101/543):
- Invoice Receipt (MIRO):
Chapter 5: Customizing Points (For Consultants)
While standard SAP works well, customization may be needed. This is done in the SPRO transaction (on-premise) or the Manage Your Solution app (Cloud).
- Special Procurement Key:
- Path: SPRO -> Materials Management -> Consumption-Based Planning -> Master Data -> Define Special Procurement Types
- Here you can review the settings for key '30' (Subcontracting) or create new ones if needed.
- PO Document Types & Item Categories:
- Path: SPRO -> Materials Management -> Purchasing -> Purchase Order -> Define Document Types / Define Item Categories
- Review settings for document type 'NB' and item category 'L'.
- Movement Types:
- Path: SPRO -> Materials Management -> Inventory Management and Physical Inventory -> Movement Types -> Copy, Change Movement Types
- Here you can analyze the settings for 541, 543, and 101, such as the account modifications that drive the financial postings.
Chapter 6: Comprehensive Test Plan
This test plan provides realistic, step-by-step exercises to validate the end-to-end subcontracting process.
Test Scenario 1: Standard Assembly Subcontracting
- Objective: To test the complete process of sending multiple components to a supplier for assembly into a finished product.
- Business Case: PharmaCo needs to assemble 50 "Drug Kits" (PH-K1000). The kit consists of 1 Drug Vial (PH-C100) and 1 Packaging Box (PH-C200). The service is performed by supplier SUB-EAST-01.
Test Prerequisites (Master Data):
- Finished Good: Material PH-K1000 created with Special Procurement Key 30.
- Components: Materials PH-C100 and PH-C200 exist.
- BOM: A production BOM exists for PH-K1000 containing 1x PH-C100 and 1x PH-C200.
- Info Record: A subcontracting info record exists for PH-K1000 and supplier SUB-EAST-01 with a service price of €5.00 per kit.
- Stock: At least 50 units of PH-C100 and 50 units of PH-C200 are available in unrestricted-use stock.
Test Steps & Expected Results:
Step | Action | Fiori App / T-Code | Expected Result |
1 | Create a Subcontracting PO for 50 units of PH-K1000 for supplier SUB-EAST-01. Use Item Category 'L'. | Manage Purchase Orders (F0842A) | A PO is created. The "Components" tab should automatically show 50 units of PH-C100 and 50 units of PH-C200. The PO price should be €250 (50 x €5.00). |
2 | Monitor subcontracting requirements for supplier SUB-EAST-01. | Monitor Subcontracting Documents (F2356) | The app should show a requirement of 50 units for both components, linked to the PO created in Step 1. |
3 | Post the Goods Issue for both components to the subcontractor. | Monitor Subcontracting Documents (F2356) or MIGO | A material document is created with Movement Type 541. The stock of PH-C100 and PH-C200 should decrease by 50 in plant stock and increase by 50 in "Stock Provided to Vendor." No accounting document is created. |
4 | Check the stock overview for the components. | Stock - Single Material (F1595) or MMBE | For PH-C100 and PH-C200, you should see a line for "Stck w. Subcontr." with a quantity of 50. |
5 | Receive 48 finished kits (PH-K1000) from the subcontractor (simulating a partial delivery). | Post Goods Receipt for Purchasing Document (F0843) | A material document is created. Movement 101: Stock of PH-K1000 increases by 48. Movement 543: "Stock Provided to Vendor" for PH-C100 and PH-C200 decreases by 48. An accounting document is created to reflect the inventory value change. |
6 | Post the supplier invoice for the 48 kits received. | Create Supplier Invoice (F0859) | An invoice document is created for €240 (48 x €5.00). A payable is posted to the supplier's account, and the GR/IR account is cleared. |
Test Scenario 2: Rework/Sorting Subcontracting
- Objective: To validate the process of sending a batch of a single product for sorting and receiving the good units back.
- Business Case: A batch of 100 "Drug Kits" (PH-K1000) has suspected packaging defects. They are sent to supplier SUB-EAST-01 for sorting. The supplier is expected to recover 90 good kits.
Test Prerequisites (Master Data):
- Material: PH-K1000 exists.
- Info Record: A subcontracting info record for PH-K1000 and supplier SUB-EAST-01 exists with a sorting service price of €1.50 per unit handled.
- Stock: At least 100 units of PH-K1000 are available in unrestricted-use stock.
Test Steps & Expected Results:
Step | Action | Fiori App / T-Code | Expected Result |
1 | Create a Subcontracting PO. Item: PH-K1000, Qty: 90. Item Category: 'L'. | Manage Purchase Orders (F0842A) | A PO is created. |
2 | Manually adjust the components in the PO. Remove any auto-populated items and add a single component line: Component: PH-K1000, Required Qty: 100. | Manage Purchase Orders (F0842A) | The PO now correctly reflects that 100 units will be provided to get 90 back. 12 |
3 | Post Goods Issue of 100 units of PH-K1000 to the subcontractor. | MIGO (Mvt 541) | A material document is posted. 100 units of PH-K1000 move from unrestricted to "Stock Provided to Vendor." |
4 | Receive the 90 sorted "good" units of PH-K1000. | Post Goods Receipt for Purchasing Document (F0843) | A material document is created. Movement 101: Stock of PH-K1000 increases by 90. Movement 543: "Stock Provided to Vendor" for PH-K1000 is consumed by 100. The 10 "lost" units are effectively scrapped from a stock perspective. An accounting document is posted. |
5 | Post the supplier invoice for the sorting service on 100 units. | Create Supplier Invoice (F0859) | An invoice document is created for €150 (100 units handled * €1.50). A payable is posted to the supplier's account. |
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