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Subcontracting in PS

Sub-contracting in SAP PS

Subcontracting is a process where we send raw material/semi-finished material to vendor to have finished. Few time there also possibility that few service need to be opted outside organization where we send the material to vendor example Pole and wires are sent to vendor for erection at site.

In SAP PS, it is not possible to use 541+Q (Q refers to Project Stock) to transfer Project stock to subcontracting vendor as Simple Subcontracting. So, it is recommended to create new storage location to each subcontracting vendor & use 311+Q movement type, based on this it is possible to monitor stock at subcontracting vendor. The cost of subcontracting is then debited to the Project.

Steps to be followed are as below:

Create vendor storage location in t-code OX09:

Go to OMJJ, select the field “movement type” and enter movement type “311” and double click on “Field selection (Enjoy)” under Dialog Structure on left side.

Create a PS Project as shown below in CJ20N:

Run MD51 for the project:

Procure material CONTRACT SUB1 and CONTRACT SUB2 my running MRP.

MD04 (Planned Order->PR->PO->MIGO)

Material will be available in WBS stock


Carry MIGO with transfer posting – Others as shown below to bring the stock vendor stock as shown below:

With partner update as shown below:

MMBE: Now transfer Child component material from project Stock to project stock but different Storage Location. This enables you to obtain an overview of those stocks that are physically located at the subcontractor. This information is particularly important when you carry out a physical inventory of the Project stocks available to vendor from project stock.

In subcontracting say Purchase order are account-assigned to object with in Project. The components are not transferred (using a transfer posting) to the “stock of material provided to vendor” but are directly withdrawn from the Project stock the time of the goods receipt. Final material manufactured is also posted to the Project stock.

Created a PO for main contract material:

With component:

Create a PR for main materials by converting planned order to PR:

Assign Material component:

Convert PR to PO and carry MIGO as shown below:

For component:

After Check:

Then click on Post.

Can’t find sub material(Component) in stock:

CJI3 report:

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      Author's profile photo hemu katta
      hemu katta

      Dear Pradeep,
      Every thing is looking sound.
      But I am not able to follow one thing i.e. Create a PS Project as shown below in CJ20N:
      Here I could not see any details of CJ20N screen. I am not following what data need to be fill in cj20n.
      Please past the screens of details, so that I will follow completely
      Thanks in advance

      Author's profile photo Tushar Korde
      Tushar Korde


      How did you make it possible to trigger 543-Q instead of 543-O? Thanks