This flowchart outlines the subcontracting process in SAP Materials Management, specifically within the materials management module.

• Requirement of Subcontracting Material (MRP/Manual): The process begins with the identification of the need for subcontracting material, which can be determined either manually or through the Material Requirements Planning (MRP) process.
• Create Subcontract Purchase Order (PO)/Schedule Lines: The buyer then creates a subcontracting purchase order and schedule lines for the material needed.
• Approve PO/Schedule: The purchase order and schedule are then approved by the appropriate authority.
• Transfer Components to Subcontractor: The warehouse clerk is responsible for transferring the necessary components to the subcontractor to perform the work.
• Create Subcontracting Challan: A subcontracting challan, which is a type of shipping document, is created for the transfer of goods to the subcontractor.
• Delivery Note: These documents are generated and accompany the goods sent to the subcontractor. They serve as legal documentation of the transfer and include tax information.
• Dispatch of Goods: The actual physical dispatch of goods to the subcontractor follows.
• Goods Receipt: Upon completion of the subcontracting work, the goods are received back from the subcontractor.
• Print GR Slip: A Goods Receipt (GR) slip is printed, which is used for recording the receipt of goods in the system.
• Reconcile Subcontracting Challan: The subcontracting challan is reconciled with the goods receipt to ensure that the correct goods and quantities have been received.
• Complete/Reversal Re-credit Subcontracting Challan: The process of completing or reversing the re-credit of the subcontracting challan occurs, adjusting any discrepancies in inventory.
• Procurement with QM: Quality Management (QM) procedures are integrated into the procurement process to ensure the quality of the received goods meets the required standards.
• Inventory GR/IR Subcontracting Consumption: This step involves recording the goods receipt and invoice receipt for the subcontracting process and accounting for the consumption of materials.
• GR/IR Vendor: The process then moves on to the goods receipt/invoice receipt reconciliation with the vendor.
• Invoice Verification: Finally, the accounts payable team performs invoice verification to confirm that invoicing from the subcontractor matches the goods received and the purchase order terms.
• Return to Vendor (Optional) / Inventory Transactions Postings: This optional step involves returning goods to the vendor if necessary and posting the appropriate inventory transactions in the system.

The flowchart provides a clear visual representation of the subcontracting process in SAP ERP, with a focus on the steps involved from the initial need through to the invoice verification and potential return of goods.