Erfurt did use subcontractors. There is evidence that Pieper in Belgium made several small parts for Erfurt.
Large gun companies usually had a network of smaller subcontractors and home workers.
Production of parts was divided in steps, performed by individual machine operators. The machines were set up with specific jigs if required and the step was checked with go/no go gauges. Workers were paid by step and only for the correct ones.
Machines were basically lathes, drills, milling machines, cutters.
I have a copy of the post war Mauser Parabellum production book. Copies are not very good, still need to find time to clean them up digitally.
Steel types varied per part. There is an overview of steel types used by Mauser in the 1930, Swiss steel types and 1970s steel types in our book 'The Parabellum is Back!'.
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