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SAP Assembly Scrap Basics

JJ old

Tip 57 from 100 Things You Should Know About Controlling with SAP 2nd Ed

SAVE 25% with coupon: JJSAP25 thru Jan 31, 2021.

SAP assembly scrap allows you to plan how many assemblies may not meet quality standards.

Since no production process is perfect, there is always a percentage of scrap produced. Assemblies or components that do not meet quality standards may either become scrap or require rework. Depending on the problem, cheaper items may become scrap, while more costly assemblies may justify rework.

 Scrap quantities are important, since they cause scrap values. Let’s follow a simple example of how assembly scrap applied at the assembly level affects lower-level component and activity quantities.

You plan to produce 100 finished printed circuit boards (PCBs). Planned assembly scrap for the finished PCBs increases component and activity quantities by 10 % as shown in the Quantity costed column in Figure 1.

Assembly Scrap

Figure 1: Component and Activity Quantities with Assembly Scrap

Assembly scrap increases the plan cost of producing the finished PCBs by increasing the quantity of components and activities. Material requirements planning (MRP) will propose a production quantity of 110 assemblies, with the expectation that 100 will be delivered to inventory and 10 confirmed as scrap.

You plan assembly scrap in the material master with Transaction MM02 or by following the menu path:

Logistics • Materials Management • Material Master • Material • Change • Immediately

Navigate to the MRP 1 view to display the screen in Figure 2.

53 002

Figure 2: Assembly Scrap Field in MRP 1 View

Complete the Assembly scrap (%) field with a flat rate percentage determined by your historical production scrap rate statistics. You should update this field prior to the next costing run if the statistics change during the current year.

Planned assembly scrap costs are included in the standard cost estimate. You can display how assembly scrap affects costs by creating a standard cost estimate with Transaction CK11N or by following menu path:

Accounting • Controlling • Product Cost Controlling • Product Cost Planning • Material Costing • Cost Estimate with Quantity Structure • Create

A standard cost estimate including assembly scrap is displayed in Figure 3.

53 003

Figure 3: Cost Estimate with Assembly Scrap

You can see the value of scrapped components in the Scrap column and corresponding quantity in the Scrap quantity column. While only material cost estimates are displayed in Figure 3, the quantity and value of all other items including activities and overhead are also increased by 10%.

You analyze plan and actual scrap variance in detailed reports with Transactions PKBC_PKO & PKBC_ORD.

100 Things About SAP Controlling
Tip 57 from 100 Things You Should Know About Controlling with SAP 2nd Ed 

SAVE 25% with coupon: JJSAP25 thru Jan 31, 2021.

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