In the Subcontracting Process, the materials are supplied to a vendor in order to perform a value added service to the material.
The following screenshot explains the process more:
The company gives a subcontracting order to the vendor mentioning the details of the services that he is required to perform. Then the components required to manufacture the final product are supplied to the vendor. Once the vendor, completes his services, he will send the material back to the plant and send an invoice for the services performed.
The following characteristics are required:
1. Subcontracting Info Record with a valid price is mandatory for the finished product.
2. Item Category "L" is to be used in the Purchase Order.
3. The components required for the activity are to maintained in the Purchase Order Material Data tab.
