[1] What is subcontracting in SAP MM and how it is useful ?[2] What is business process in MM and what is purchasing cycle ?[3]What is ABC analysis and VDO analysis in Inventory Management ?[4]How to cover taxes in procurement orders in SAP MM implementation ?[5]What is difference between stock transfer and transfer posting ?I hope that geekinterviewteam will post all this crucial questions to the site so somebody will answer it and it can be useful for many aspirants.

PRAMOD BALAKRISHNAN

Sep 30th, 2006

Sub-contracting is a form of out sourceing. Material(s) provided by customer is processed and return back to customer as a finished or semi-finished product.
It is usefull to reduce the production load in industries.

Sheytal Ranadive

Oct 25th, 2006

Subcontracting is the Delegation by one enterprise (Say Manufacturer), of a portion of its production process, under contract, to another company (Say Contractor), who specializes in these production activities. In other words it is Production Outsourcing.

SubContracting is often resorted to, by manufacturing companies due to limited in house production capacities of a Part of their Production Processes.

In a typical Subcontracting scenario, the Manufacturer sends Material (Inputs-Raw Material, Semi Finished Goods like Spares, components, etc) from his Stock to the SubContractor for Job-Work / Processing.

After the Processing, the Manufacturer receives back the Material in Changed Form or in other words a different Material.

azam_s007
Profile Answers by azam_s007 Questions by azam_s007

Jan 9th, 2007

subcontracting is an special procurement.In this all the components are brought from other companies and BOM is attached to PO.

manojnile
Profile Answers by manojnile

Apr 6th, 2009

MM Subcontracting process involves sending raw components to a vendor for specific manufacturing processes and receiving the value-added finished material back into inventory.
A Subcontract Purchase Requisition is either generated via the Material Requirements Planning process or manually by a requestor. A Buyer will validate the accuracy of the Purchase Requisition and convert it into a Purchase Order. The purchase order is subject to approval based on predefined parameters prior to being issued to a vendor.
The consumption of sent components is recorded upon receipt of the value-added finished material. The vendor sends the invoice for the services provided which is paid during the normal payment cycle.