Multi-metals

[Former Member]

Hi Experts,

We have a requirement for a Mining Company to sell a scrap of material (mining aisle scarp) which can contain differents metals that will be processed and then paid by the customer.

Each metal found after the production processes (tolling in the customer) will have different payments terms, prices, LMEs and discounts, anyways different contract condition at the item level. However as it said before, it must be under a single material code.

What would be your suggestions:

1- Either configure the product hierarchy, would I be able to change the terms mentioned above?

2- Should I use Variant Configuration, would I be able to post good issue only one material and Invoice each one of the metals specified in the contracts with their respective commercial rules?

The main issue here is, we need to PGI only one main material, since we do not know how much of the metals are available from this scrap, and invoice later on the final invoice all the metals that were found.

Hopefully your knowledge will help us on this matter!

Best Regards

Vinicius

[Former Member]

Hello Vinicius

Interesting scenario.

How will your customer let you know of the mix percentages? Just curious.

I would handle it this way using VC and BOM concept.

a) Set up a single material for the header Alloy material (scrap). Let us call this A. Let us say A could contain the following metals, for example

Aluminum-

Nickel-

Gold

Silver

Copper

b) Set up a BOM with dependencies to determine the quantities based on content percentage. Let us say A could contain the following metals, for example

Aluminum-

Nickel-

Gold

Silver

Copper

The content of each metal can be mapped to one or more characteristics, example one for Aluminum content, which is a % type of numeric characteristic, another for Nickel content and so on. Or you can have 2 characteristics- one for metal name and second for mix % (Content)

c) Here is the real challenge. How to set up the order to cash process? The main material (A) is entered on the order, delivered and PGIed. After the customer informs the content, I don't think you can explode at invoice time. I am also not sure if you can explode the BOM in a sales order after PGI, you need to try it. Else I would say create a quote and use it as a placeholder till the customer informs the contents acheived. Once it is known, enter the order and explode the BOM with VC, deliver and PGI it.

Does it work? Let me know your thoughts and final solution.

[stefan_weisenberger]

This message was moderated.

[Ruediger1]

Hi,

You could use commodity management for it.

For each metal contained you would create a condition type and put it into the pricing procedure.

The material would use batch specific Unit of Measure, where for each metal a unit of measure is defined and in the material master a default conversion factor is maintained as proportional unit of measure.

The condition types would pick up based on the metal UoM the quantity being contained. The condition type would also use commodity pricing to determine the specific metal price from the various market places like LME.

You can have different terms to determine the final price for each metal independently, but the item itself will have the all the same payment terms.

If you google SAP Commodity Management, you will find additional information on the solution.

If you like to specify certain quality requirements and contents on a contract/sales orders you can use variant configuration or configurable material variants (if you want to use Make to stock), but that may require a note with code modification to enable a standard ERP system (available in Mill solution though).

Regards

Ruediger