What is subcontracting in SAP SCM-APO-PPS - Production Planning and Detailed Scheduling?

SAP Term: subcontracting

• Component: SCM-APO-PPS

• Component Name: Production Planning and Detailed Scheduling

• Description: A process during which a product ordered product is manufactured by a vendor subcontractor who, however, requires certain components products to be provided in order to manufacture the product; These components are to be provided by the ordering party or by a third party. The vendor subcontractor sends the ordered product back to the ordering party, who then uses the ordered product as a component for the finished product.

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• Key Concepts: 
  Subcontracting is a process in which a company outsources certain tasks or services to an external supplier. In SAP, subcontracting is used in the Production Planning and Detailed Scheduling (PPS) component of the Supply Chain Management (SCM) Advanced Planner and Optimizer (APO). It allows companies to outsource production of certain components or services to external suppliers, while still maintaining control over the production process. 
  
  How to use it: 
  In SAP, subcontracting is used in the PPS component of SCM-APO. To use subcontracting, companies must first define the subcontracting process in the system. This includes setting up the subcontracting materials, defining the subcontracting operations, and setting up the subcontracting vendors. Once this is done, companies can then create production orders for the subcontracting materials and operations. The system will then automatically generate purchase orders for the subcontracting vendors. 
  
  Tips & Tricks: 
  When setting up subcontracting in SAP, it is important to ensure that all of the necessary information is entered correctly. This includes entering accurate information about the subcontracting materials, operations, and vendors. Additionally, it is important to ensure that all of the necessary documents are attached to the purchase orders for the subcontracting vendors. 
  
  Related Information: 
  Subcontracting is just one of many features available in SAP’s Production Planning and Detailed Scheduling component of SCM-APO. Other features include capacity planning, material requirements planning, and demand planning. Additionally, there are many other components of SCM-APO that can be used to optimize supply chain processes.