Scrap categories and their effects on SAP PP (2023)

Understand Assembly Scrap, Component Scrap, and Operation Scrap in SAP PP-CO

In production,junk yardit is an inevitable part of the production process. Eitherexcess material, defective parts or damaged products, junk yardcan have a significant impact on a company's bottom line. To manage waste effectively, many manufacturing companies use SAP, an enterprise resource planning (ERP) software that integrates production planning and control functions.

Assembly scrap, component scrap, and operations scrap are terms used in manufacturing processes to refer to the amount of raw material or product that is lost or scrapped during the production process.

No SAP PP existsthree types of scrapthat are commonly used:Assembly scrap, component scrap and operational scrap. Let's take a look at each oneScrap type and its impact on SAP PP.

Different types of garbage have different effects:

1. No material master recordassembly scrap(MRP view 1)

2. components scrapin the parts list (List of materials) or the material master record (MRP 4 visualization)

3. operating scrapinsideList of materials(list of materials)Örouting

Scrap categories and their impact on SAP PP

Example: Multiple waste dates and their impact on SAPLet's say a manufacturing company produces bicycles. During the production process, the company generates waste in different ways:

• assembly scrap:5% of the raw materials used in the assembly process are wasted due to lack or excess of material.

• component scrap:2% of the components used in the manufacture of bicycles are lost or damaged during the manufacturing process.

• Junk-Operation: During the painting process, 3% of bicycles are damaged or unusable due to imperfections or handling errors.

The company can capture this scrap data in SAP andUse it for analysis to identify areas where waste can be reduced and manufacturing processes improved.For example, if the company finds that a large amount of material is being lost during a painting operation, it can investigate the cause and make changes to reduce the amount of waste generated in that operation.By reducing waste, the company can improve profitability, reduce costs and increase customer satisfaction.

Configuration overview and process flow for assembly scrap, component scrap and operation scrap in SAP

• assembly scrap

assembly scrapis the amount of raw material lost or thrown away during productionassembly process. This could be things like broken or damaged parts, excess material, or material that cannot be used due to defects. Assembly scrap can have a significant impact on cost of sales (COGS) and gross margin. Tracking assembly scrap in SAP PP-CO,Manufacturing companies can identify areas of waste and take action to reduce waste and improve profitability.

Use the assembly scrap feature to plan for scrap that occurs during the manufacture of an assembly. By adjusting the number of dependent requirements created during the MRP run,assembly scrapincreases the order quantity for the assembly and, as a result, the order quantity for each component in the assembly BOM.

Based on the scrap percentage, the system automatically increases the quantity to be produced. However, the system always calculates pool availability based on estimated performance. In addition, MRP or stock/requirements lists always show the expected assembly work.

Scrap is only used if the material is an assembly. Bad quality or unfavorable working conditions, such as heat, cold or humidity, are causes of rejection of assemblies.

For example

You produce 100 pieces of finished product. You have entered a 10% assembly scrap in the material master of the finished product. When you produce the final product, the system increases the required quantities and activities so that the required lot size of 100 units can be calculated or produced.

Ideas:You can put assembly waste in the(PvP 1)material master view. Enter assembly rejection in percent hereAssembly scrap (%)campo.

• To hold(10%)as assembly scrap(PvP 1)see in the material master.

• Header material finished product BOM structure with three components (material A, material B, material C)

• Create process order for finished product material with order quantity 1

• The system increases the component quantities by10%

Scrap in operation in routing

operating scrapis the amount of material that is lost or scrapped during a given manufacturing operation. This can include things like excess material, material that cannot be used due to defects, or material lost during handling or processing.Scrap from operations can affect production cycle time, throughput of the production process, and cost of goods sold (COGS).. When tracking transaction rejection in SAPManufacturing companies can identify which operations generate the most waste and take steps to optimize the manufacturing process.

junk yardexpected to be produced during a given operation.

The amount of activity consumed is indicated byRejection of the operation inserted in the route.

Ideas:

• insideArticle overview,go to theGeneral information

• You may come insteep operationin percentage

Residues of operations and components in the BOM

components scrapIt is the amount of raw material lost or wasted in the manufacture of individual components. This can include things like excess material, material that cannot be used due to defects, or parts that are damaged or unusable.Component scrap can affect production cycle time and production process performance. When tracking component scrap in SAP PP,Manufacturing companies can identify which components generate the most waste and take steps to optimize the manufacturing process.

If the material is a component, reject planned production.

Component scrap can be posted in the MRP4 view of the material master. In percentage form. The system takes this material into account when calculating scrap if it is later used as a component in the BOM.

At period-end closing, unplanned component scrap is shown as an incoming quantity variance in the "order cost" and "period-specific product cost" tables.

The system first determines assembly scrap and then component scrap. The calculated scrap quantities are added together and as a result the required quantity is increased.

Ideas:

The following options are available to specify component rejection:

• It is maintained in the material master record(MRP 4 visualization)

• insidegood article

You may come incomponents scraplike thissteep operationas a percentage If you enter process scrap as a percentage, also select thenetwork identification field.

Process flow:

• Header material finished product BOM structure with three components (material A, material B, material C)

• To hold(5%)as scrap of components in thegood article.

• ÖTo hold(5%)as scrap of components in the(PvP 4)see in the material master.

• Create a production order for the finished product material with an order quantity of 1

• The system increases the component quantities by5%

Example 1

A 10% component scrap is entered in the material master for raw material component B of semifinished product X. Therefore, the system costs 100 pieces of finished product at 55 ST (50 + 10%) of raw material. press B, not 50 ST. Component scrap is 5 pcs.

10% of finished product component scrap for raw material A has been entered in the material master. The system costs 110 kg of raw material A (100 kg plus 10%) Component waste is 10 kg.

example 2

You have entered a 10% assembly scrap for the finished product in the material master. You have entered a 10% component scrap for the Raw Material A and Raw Material B components.

Example 3

You have entered 10% assembly scrap for the finished product and semi-finished product X in the material master. You have entered a 10% component scrap for the Raw Material A and Raw Material B components.