The fundamental purpose of the subcontracting process in SAP is to manage an outsourced manufacturing scenario. This begins by creating a subcontracting purchase order. This document serves as the primary communication tool to the subcontractor, formally specifying the finished product being ordered. The system then uses the Bill of Materials (BOM) linked to the finished product to determine and list the specific components that the ordering company must provide to the subcontractor to complete the manufacturing task. This information exchange is the critical first step that enables the entire process.

A. The buyer provides specifications and components but does not directly control the subcontractor's internal manufacturing process; operational control remains with the subcontractor.

C. Payment deferral is governed by the payment terms on the invoice, which is a general procurement function, not a specific goal of the subcontracting process.

D. While advanced integrations (like with SAP Ariba Network) can enhance visibility, the core SAP ERP/S/4HANA subcontracting process focuses on component and finished goods logistics, not real-time production status tracking.

1. SAP Help Portal for SAP S/4HANA

"Subcontracting": "In subcontracting

you order a product from a subcontractor. You provide the subcontractor with the components required to manufacture the product. In the SAP system

the subcontracting process is handled by means of a subcontract order." This source directly validates that informing the subcontractor about the product and components is the core activity. (Accessed under SAP S/4HANA -> Sourcing and Procurement -> Operational Procurement -> Subcontracting).

2. SAP Learning Hub

Course S4500 - Business Processes in SAP S/4HANA Sourcing and Procurement

Unit: "Subcontracting": The course material explains that a subcontracting purchase order is created with item category 'L'. The system then explodes the Bill of Material (BOM) for the ordered material to determine the components to be provided to the vendor

which are then listed in the purchase order. This confirms the mechanism for informing the subcontractor.

3. SAP Press

"Materials Management with SAP S/4HANA: Business Processes and Configuration" (2022)

Chapter 7

Section 7.4 "Subcontracting": This chapter details the process flow

stating

"The process begins with the creation of a subcontracting purchase order... The components that need to be provided to the subcontractor are entered in the PO." This explicitly supports the function described in the correct answer.