| # Generating subcontracting purchase orders Subcontracting is a common practice in manufacturing industries. Part of a production process is subcontracted for several reasons, a specialized operation can be needed for which the company does not have the proper facilities, enough capacity is not available, or the work is comprehensive and could be expensive if carried out internally. LN treats subcontracting as buying an operation. Therefore a purchase order must be created when subcontracting is carried out. The order status of the operations that you select must be Released or Active. Use Generate Subcontracting Purchase Orders (tisfc2250m000) to create subcontracting orders, which are processed in the Purchase Control module. A purchase-order line is created for each subcontracted operation. You can use this session for the following types of subcontracting: Subcontracting without material flow. Operation subcontracting with material flow. You cannot use this session for item subcontracting. Unit effectivity and subcontracting A subcontracted item can be unit effective, or can be part of a unit effective main item. In those cases, the effectivity unit is displayed on the purchase order of the subcontracted item. If the subcontracted items encompass more than one effectivity unit, which means that more than one distribution line is present in the Order Distribution (tisfc0105m000) session, the effectivity unit displayed on the purchase order is 0 (zero). Note If you regularly subcontract to a work center within your own organization but in a different company, it is better to set up a shared work center relationship, which avoids the need for purchase orders. For more information, refer to Shared work centers. Related topics Overview of subcontracting Operation subcontracting without material flow support Shared work centers |