Subcontracting is a standard process in SAP ERP. But, this is not a core feature of SAP SRM but is a Procurement for Public Sector(PPS) solution.
Subcontracting feature is retrofitted to SRM core. Subcontracting allows user to order a product from a supplier who requires certain components to manufacture the product. The components are provided by the ordering party. They are consumed or transformed during the production.
The subcontracting components you provide to the supplier are based on a Bill of Material(BOM) for the product that is stored in the SAP ERP system. Subcontracting in the SAP Supplier Relationship Management (SAP SRM) system is limited to fulfilling requirements that are based on purchase requisitions created in SAP ERP where the component data is available or creation of BOM from a central contract if it is not created in the SAP ERP system.
The component information is routed through the procurement process in SAP SRM. In sourcing, the subcontracting requisition can be sourced against a suitable subcontracting contract. Goods issue of the components as well as goods receipt for the product is carried out in the SAP ERP system.
User can create a BOM for a product in the SAP ERP system. It automatically provides the components for a Subcontracting Purchase Requisition. The system routes the PR through procurement process in SRM if extended classic scenario with PPS functionality is used.
In SRM user can create a Contract line item as a subcontracting line item. This line item can then be used as a source of supply for subcontracting PR line item. The subcontracting components can be viewed in SRM but cannot be changed. User can create a BOM from a Central Contract at item level within SAP SRM if the BOM doesn't exists in SAP ERP. The data from the BOM gets updated in the SAP ERP system. User cannot update BOM once it is successfully replicated to SAP ERP system. After Purchase Order is successfully replicated to SAP ERP the follow on activities can be carried out there.
In the SAP ERP system:
- Activate the Customizing switch under SAP Customizing Implementation Guide. Select the check box against SRM Government Procurement.
- Activate the customizing switch under SAP Customizing Implementation Guide
Subcontractingfield. Execute the customizing and select the checkbox against the
- Maintain profiles for procurement of external requirements under SAP Customizing Implementation Guide. This allows transfer of purchase requisitions from the SAP ERP system to the SAP SRM system
- Maintain the combinations of material group and purchasing groups according to the profiles under SAP Customizing Implementation Guide.
- Implement SAP Note 2200270.
In the SAP SRM system:
To use the feature, you have to first activate the Business Function SRM_CONT_IMPR3 and then activate the Customizing switch Subcontracting(CIF_702_SUBCONTRACTING) under SRM Server-> Cross-Application Basic Settings->Subcontracting-> Activate/Deactivate Subcontracting.
To enable creation of BOM from a central contract within SAP SRM activate the Customizing Switch under, SRM Server-> Cross-Application Basic Settings->Subcontracting-> Activate/Deactivate Creation of BOM from Contract.
For complete details about SAP SRM 7.03 refer: SAP SRM 7.03