SAP Assembly Scrap Basics

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SAP assembly scrap allows you to plan for faulty or damaged assemblies.

Since no production process is perfect,  some scrap is always produced. You can either scrap or rework assemblies and components that do not meet quality standards. Depending on the problem, you may scrap cheaper items and rework costly items.

When setting up SAP Scrap we recommend you work with our ERPCorp experts: 

Learn about ERPCorp Coaching & Consulting

Let’s follow an example: 

You plan to produce 100 finished Printed Circuit Boards (PCBs). Plan assembly scrap for the PCBs increases component and activity quantities by 10% as shown in the Quantity costed column in Figure 1 below.

Assembly Scrap

Figure 1: Component and Activity Quantities with Assembly Scrap

Assembly scrap increases the plan cost of producing the PCBs by increasing lower-level quantities. MRP proposes a production quantity of 110 expecting 100 delivered to inventory and 10 confirmed as scrap.

You plan assembly scrap in the MRP 1 view with Transaction MM02 or via menu path:

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

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

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Figure 2: Assembly Scrap Field in MRP 1 View

Complete the Assembly scrap (%) field with a percentage from your production scrap rate. Update this field prior to the next costing run if  your rate changes.

Plann 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 via 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 shown in Figure 3 below.

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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 scrap variance in detailed reports: PKBC_PKO & PKBC_ORD.

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