What is Outsourced Manufacturing in SAP MM - Materials Management?

SAP Term: Outsourced Manufacturing

• Component: MM

• Component Name: Materials Management

• Description: Name of business function transaction SFW5

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• Key Concepts: 
  Outsourced Manufacturing is a process in SAP Materials Management (MM) that allows companies to outsource the production of goods to external vendors. This process involves the transfer of materials and services from an external vendor to the company, and the payment of invoices for these services. The process also includes the tracking of materials and services, as well as the management of vendor relationships. 
  
  How to use it: 
  In SAP MM, Outsourced Manufacturing can be used to manage the entire process from ordering materials and services from vendors, to tracking their delivery and payment. The system allows companies to create purchase orders for materials and services, track their delivery, and manage vendor relationships. It also allows companies to track invoices for these services, and manage payments. 
  
  Tips & Tricks: 
  When using Outsourced Manufacturing in SAP MM, it is important to ensure that all materials and services are tracked accurately. This will help ensure that all invoices are paid on time, and that vendors are managed effectively. Additionally, it is important to ensure that all vendors are properly vetted before entering into a contract with them. 
  
  Related Information: 
  Outsourced Manufacturing is closely related to other processes in SAP MM such as Purchasing, Inventory Management, and Vendor Management. It is important to understand how these processes interact with each other in order to effectively manage outsourced manufacturing. Additionally, it is important to understand how these processes interact with other systems such as Financial Accounting (FI) and Controlling (CO).