Subcontracting Po in Sap Mm Tcode

Subcontracting is a common practice in the manufacturing industry where a company hires a third-party to complete certain parts of the production process. SAP MM, which stands for Materials Management, is a module in SAP that handles the procurement and inventory functions of a business. In this article, we will discuss the process of subcontracting in SAP MM, specifically using the Tcode PO.

First, let`s define what a subcontracting PO is. A subcontracting Purchase Order (PO) is a type of PO used in SAP MM to procure materials from a vendor who will use those materials to manufacture a finished product on behalf of the company. The main difference between a standard PO and a subcontracting PO is that with a subcontracting PO, the vendor is responsible for certain parts of the production process.

Now that we have identified what a subcontracting PO is, let`s look at how to create one in SAP MM. The first step is to create a material master record for the material that will be outsourced. This record should include all of the necessary information such as the material description, the unit of measure, and the procurement type. Once the material master record is created, the next step is to create a subcontracting PO.

To create a subcontracting PO, navigate to the Tcode ME21N. This is the transaction code used to create purchase orders in SAP MM. In the PO creation screen, select the appropriate vendor and enter the material that will be outsourced. In the item details section, select the procurement type as “F” (external procurement). This will allow you to specify the subcontracting vendor and the goods recipient.

Once the PO is created, the next step is to issue the material to the subcontractor. This is done by creating a transfer posting in SAP MM using the Tcode MIGO. In the transfer posting, select the movement type 541. This will allow you to issue the material to the subcontractor and also create a stock posting for the finished product that will be received from the subcontractor.

After the subcontractor has completed the production process, they will send the finished product back to the company. To receive the finished product, create a goods receipt in SAP MM using the Tcode MIGO. In the goods receipt, select the movement type 101. This will allow you to receive the finished product and also create a goods receipt posting for the subcontracting PO.

In conclusion, subcontracting in SAP MM using the Tcode PO is a straightforward process that can be completed with just a few steps. By following the process outlined in this article, you can effectively manage your subcontracting operations in SAP MM and ensure timely delivery of finished products to your customers.

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