The subcontract manufacturing scenario covers the process flow that relates to procurement of external manufacturing services that requires transfer of raw materials and components to the vendor and receipt of a finished product (work performed).

This scenario has different alternatives:

• Purchase from a subcontractor a specific manufacturing service, which is a certain production stage in the entire in-house manufacturing process (external subcontracting).
• Purchase of the entire production cycle (toll manufacturing).

You can initiate the subcontract manufacturing scenario from any production scenario as well as from a sales order.

The required raw materials and components are provided to the subcontractor by the company in accordance with the BOM and route sheets. Manufactured products are delivered to the company's warehouse.

Contracts with subcontractors usually include the terms of regular issue of notifications of available raw materials and components, physical inventory count results, and products manufactured during the reporting period.