How does SAP manage the subcontracting procurement process?

Subcontracting procurement is a common business process in which raw materials are given to a vendor to produce semi-finished or finished products which are then transferred to you. A subcontracting purchase order, which is distinguished by item category L, is created and issued to a vendor; component raw materials are issued to the vendor; a goods receipt is made when the vendor delivers the finished product; and then invoice and subsequent settlement is done.