SUBCONTRACTING

Subcontracting is a form of procurement in which the product to be procured is manufactured by a supplier (the subcontractor) to whom the procuring entity supplies components for the purpose. The procuring entity may provide these components to the subcontractor either directly (using one of its plants), or indirectly (using another of its suppliers). When the manufacturing process has been completed, the subcontractor delivers the ordered product (incorporating the components provided) to the ordering party. Subcontracting involves the procurement of a product from a supplier (the subcontractor) to whom the procuring entity provides components for the purpose. In SAP APO, subcontracting process can be planned in Production Planning and Detailed Scheduling (PP/DS) and in Supply Network Planning (SNP). You have the following options: 1. If the components for the finished product are to be provided by the ordering party (plant), you can plan as follows:

Subcontracting with Source Location in PP/DS Subcontracting Without Source Location in PP/DS Subcontracting with Scheduling Agreements in PP/DS Subcontracting with Source Location in SNP

2. If the components for the finished product are to be provided by another supplier, you can plan as follows:

Subcontracting with Third-Party Provision of Components in PP/DS Subcontracting with Third-Party Provision of Components in SNP

In this document only SNP Subcontracting process will be covered.

SNP Subcontracting Process

In SAP APO, only one plant per subcontractor is currently supported (for each product). This means that always only one plant can order from one subcontractor and the subcontracting components (materials/components provided to the subcontractor) can only come from the plant to which the ordered product is supplied. If you have modeled several plants per subcontractor in SAP R/3, you can transfer these relationships to the SAP SCM system via APO-CIF (SAP APO

Core Interface). They are then represented as one-to-one relationships between subcontractors and plants in SAP APO. Standard subcontracting scenario occurs between plant and vendor. However, if the relationship is not one-to-one; case differs from the standard. For this scenario, subcontractor should be created. Details of this scenario are given in the document. In SNP, the heuristic-based and optimization-based planning approaches are available for the subcontracting process. However, the planning procedures deployment, transport load building (TLB), and capacity leveling are not possible. In order to implement SNP subcontracting scenarios successfully, some important data and settings are needed in R/3 and APO systems; and in integration of these two systems.