The primary strategic benefit of subcontracting is to outsource specific manufacturing processes to a specialized partner. This allows the buying organization to concentrate its resources, capital, and expertise on its core competencies and higher-margin activities. SAP Business Network Supply Chain Collaboration facilitates this strategy by providing real-time visibility into component inventory, production status, and shipments from the subcontractor. This enhanced collaboration and control make the outsourcing process more reliable and efficient, thereby enabling the buyer to confidently focus on its core mission.

B. Reduced costs by deferring the ownership of materials until they are consumed: This describes the consignment inventory process, a distinct supply chain model where the supplier owns the goods until the buyer uses them.

C. Increased savings by tracking orders against rebate thresholds: This is a function of rebate management within procurement, not a direct benefit of the operational collaboration in a subcontracting scenario.

D. Inventory managed by the supplier at buyer location: This describes Vendor-Managed Inventory (VMI), where the supplier is responsible for maintaining inventory levels at the buyer's facility.

1. SAP Help Portal

SAP Business Network Supply Chain Collaboration

"Subcontracting with SAP Business Network": This document outlines the process where a buyer sends components to a supplier for manufacturing. The core value proposition is gaining "greater visibility into their subcontracting process and to collaborate with their suppliers in real time

" which underpins the ability to effectively outsource and focus on core tasks. (Accessed under the SAP Business Network for Supply Chain section).

2. SAP Learning Hub

Course SCC1C (SAP Business Network Supply Chain Collaboration)

Unit: Subcontracting: The official courseware for the CARSCC2404 certification explains that a key business driver for subcontracting is to leverage external manufacturing capacity and expertise. This directly supports the strategic goal of allocating internal resources to more profitable

core activities.

3. SAP S/4HANA Documentation

"Subcontracting (2NX)": In the Best Practice Explorer for SAP S/4HANA (which integrates with SAP Business Network)

the scope item description for subcontracting implicitly supports this benefit. By defining a streamlined process for outsourcing production

it enables companies to focus on their primary operations while relying on partners for specific manufacturing steps.