cancel
Showing results for 
Search instead for 
Did you mean: 

Subcontarcting Vs Service

Former Member
0 Kudos

HI Guru's

How can we diffrentiate between scubcontracting and services, as in subcontracting process, vendor charges for his services and the componets are provided by component.

Also in services, the vendor di its services and get paid for it.

Thanks in advance

Accepted Solutions (1)

Accepted Solutions (1)

Former Member

Hello,

Subcontracting --> Process where the vendor perfoms the services or the completes the process, uses the raw materials provided

by the company to turn into a finished product. A subcontracting PO is raised with a Item category "L". Then a GI is done to the vendor. After the process is completed the vendor supplies the Finished product, GR is done.

Services--> There is no material issued as such, the vendor charges for the services provided with or without a contract, A service PO is raised with item Category "D". In this no GR is done, however a service entry and service acceptance is done for the services performed by the vendor. The vendor payment is settled by automatic settlement, using ERS.

Hope that gives some clarification. Pl award points if helpful.

Steve.

Answers (2)

Answers (2)

Former Member
0 Kudos

So do a contract or a Inforecord is mandatory for a subcontarcting order.

Former Member
0 Kudos

Hi

For subcontracting you need to create subcontracting info record and BOM for the parent material

For service you need to create service master record for the services

Regards

Amuthan M

kunal_ingale
Active Contributor
0 Kudos

hi

it is not nessesay o maintain contract but u can maintain the inforecord for the finish product and bom for same

subcontracting

http://help.sap.com/bp_blv1600/V5600/BBLibrary/HTML/138_EN_IN.htm

service

http://help.sap.com/bp_blv1600/V5600/BBLibrary/HTML/209_EN_IN.htm

regards

kunal

Former Member
0 Kudos

Dear,

Subcontract

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.

Service

Is a service provided by external vendor to fulfilling a job. For example - Motor rewinding, Engine overhaul, Construction of Boundary wall etc etc.

Hope its clear to you,

Regards,

Syed Hussain.