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Hi SAPians,


First let’s have a short introduction and overview of the functionality of the "Subcontracting Process in Production Planning".

SAP Subcontracting involves sending components to a vendor to manufacture an assembly. The vendor returns the completed assembly, and during goods receipt GR, the components are issued from subcontract inventory. Subcontracting is a purchasing process with the manufacturing occurring at the vendor location.

There are two types of subcontracting process in production planning.

1.Assembly Subcontracting

2.Operation Subcontracting

Assembly Subcontracting:


Due to some capacity problems or operational issues in manufacturing plant entire product is asked to produce outside (which mean vendor place) and component materials are given to vendor with a subcontracting purchase order.

Vendor produces a product and supplies the product to Plant.

Process flow - Assembly Subcontracting

  • Make configuration settings for special procurement key.

Configuration Path: spro > Production > MRP > Master data > Define special procurement type.

  • Make settings in header material master of MRP View 2 of subcontracting in MM02.

  • Create the master data which related to production like BOM, Resource, Master recipe, Prod.version for header material.

  • Give the requirement for planning in MD61 Screen.

  • MRP Run for header material in MD02 Screen.

  • Converted generated PR to PO in MD04 Screen.

  • For converting PR into PO 1st release the PR using Release Pur.Req tile (ME54N)

Enter PR number generated in MD04 screen.

  • Move to the release strategy tab enable the tick mark.

  • After release save the Pur.req.

  • Now convert the process as PR into PO.

  • Purchase Order will be created.

  • Issue the components to PO material in MIGO Screen using 541 Movement type

541 Mvt type – Transfer the stock from unrestricted to subcontracting stock.

  • Check and post the component.

  • Now check for the stock of the raw materials in MMBE they will be shown as Stock provided to vendor as below.

  • Goods receipt for header material in MIGO Screen. Enter the cost center for each material, after check and post the document.

  • Now check for the stock of the Header material in MMBE.

Operation Subcontracting:


In house production material (Header material) is produced with three operations out of which second operation is performed outside (provided to vendor) due to various reasons like Machine breakdown, capacity problems.

Example: BOM of the material contains three components. First operation uses first component, second operation which is performed externally, uses second component and Third operation uses third component.

Scenario for Operational Subcontracting

Process flow - Operational Subcontracting

  • Create BOM for header material as shown below with CS01 with the components as input materials.

  • Create routing for material with three operations and for second operation assign control key PI02 (external Operation) and no need to maintain the work center for the second operation.

  • Assign the component materials to the respective operations. For the second operation enable subcontracting box assign external processing parameters...like details of Purch. Organization, Purchasing group, Material Group and others as per the requirement.

  • Create the production/ process order for the header material with CO01 or COR1. Release and save the order.

  • Move to operation tab.

  • Double tab the external operation.

  • Check for the generation of Purchase Requisition in the Ext. Processing Tab.

  • Move to the material list tab choose the material which you have to process as external processing and select the symbol which called reassign and assign the external operation item number and save it.

  • By using PR which generated in External processing tab convert PR into PO Process.

  • Issue the First and Third components to production order using transaction code MIGO.

  • Check and post the document.

  • Confirm the first Operation with transaction COR6N/CO11N after completion of the same as shown below and save.

  • Now issue this component to the purchase order with movement type 541 through transaction MIGO as shown below. Check and post the document.

  • Now check the stock of second component appearing as Stock provided to vendor.

  • Once the second operation completed by the vendor semi-finished product is sent back to plant for execution of third operation.

  • Now make GR for material with the purchase order with 101 movements and during this GR second component.

  • Stock is consumed which is provided to vendor.

  • Now confirm the Third Operation in the Production Order.

  • Make the goods receipt for the order through MIGO.

  • Now check the stock in stock overview for header material.


I hope this is useful for all of our community Team members regarding MRP related Fiori Apps.

I believe, it will be helpful and will provide sufficient information.

Thanks For Reading. Please share your reviews & feedback…


Thanks & regards,

Subathra Priya R.

SAP PP- QM- PM Consultant.
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