Scrap Sales

[atgsd_atgsd]

Dear SAP consultants,

There is one requirement from our client, they are selling cut & bend ( C& B) material from rebar, while producing C& B product for every 10 tons of C& B product 1 ton of scrap will generate. the  sales dept. want to charge this scrap price from customer. and this scrap only for sales invoicing purpose not relevant for delivery only they want to put in sales order so that they can do the sales invoice and this scrap they will not deliver to customer.  please give your  valuable inputs.

EX: 1. when they create sales order line item 10 C& B quantity 10 tons

system has to propose automatically line item 20 scrap quantity 1 ton and its price.

this scrap item is not relevant for delivery but only relevant for invoice which is to be charged to the customer

Thanks and Regards

ATGSD

[former_member184065 · Accepted solution]

Hi Friend,

I think,You can make this Scenario with Free Good Exclusion (10 (= 10 Tons of C&B Product Quantity) + 1 (= 1 Ton of Scrap Product)  Rule).

Ex:1. Create Main Material as 10 Line Item in Sales Order for 10 Tons of C& B Quantity.

2. Automatically ,the 20 Line Item will generate with 10 Line Item in Sales Order but in Free Good Scenario actually ,The Free Good is free but in you case, make as relevant for Price but not Delivery in Item Category settings.

Please let me know if you have any doubts /thoughts on your query to make as different to get correct Outcome.

Thanks,

Naren

[atgsd_atgsd · Accepted solution]

Dear Narendra,

Thanks for your inputs.  I will test this scenario then revert back.

Regards,

[former_member182378 · Accepted solution]

Narendra, ATGSD,

I would not go for with the "Free goods" way. I would go for BOM, as suggested by Suman.

The disadvantages of "Free goods" way:

Free goods procedure would have to be assigned to all the sales document types (OR, RO, CS, RE etc.) to fulfill this requirement.

- Too much maintenance (condition records, configuration etc.)

- Suppose for sales document type OR you have to give additional free goods for this material (later on) then that would not be possible, as the assignment of free goods procedure is exhausted.

Changing / creation of new item category, with reference to TANN - for relevant for Pricing.

[atgsd_atgsd · Accepted solution]

Thanks TW  I will test both the scenarios

Regards,

[former_member182378 · Accepted solution]

ATGSD,

After reading some theory - I do not think BOM fits your business requirement.

BOM main item should be composed of the sub-items.

E.g.

BOM main item = Laptop KIT

Sub items = Laptop, mouse, power cable.

Your example -

Header is not composed of the sub items.

Furthermore, in BOM (seen from standard SAP) pricing is either at main item level or subitem level, and NOT at both levels.

Alternate solution -

If every time, 10% is the scrap, then -

1. Have only the material C&B in your sales order, as item 10

2. In e.g. item 10, as a surcharge have 10% (of quantity of C&B) for Scrap, in the pricing of C&B. With this condition type have a description.

This description can be populated in the billing document.

[atgsd_atgsd · Accepted solution]

Dear TW,

Thanks for your input, I have tested the sales BOM did all the configs even though system not allowing me to bill both items main and sub item. as you said it is correct whether main item or sub item, we can not bill the both item at time.

any inputs

Regards,

[former_member182378 · Accepted solution]

atgsd,

as you said it is correct whether main item or sub item, we can not bill the both item at time.

Have you tried by giving Billing relevance = A for both item categories (both items) in VOV7?

What I said was pricing was not given at both levels in BOM in standard SAP

On the other hand, did you try the "alternate solution" which I had suggested?

[atgsd_atgsd · Accepted solution]

Dear TW,

Yes i tried as mention above A for the both item even though there is no result I test your alternate solution tomorrow if you have any other idea please let me know.

Regards,

[former_member184065 · Accepted solution]

Hello,

Please follow whatever , I am saying below,

  In Standard Settings ,you can't get Condition Record for Sub Item but you can get Condition Record to  Main Item when you process ERLA as Item category Group to Main Item and for Sub Item NORM-Item Category Group. If you want get Condition record to Sub Items also Please maintain Item category Group as ERLA to Sub Item in Material Master and also Assignments.

SD Type        ITCaGr      Usage                H ItCaGr    DftCaGr

OR                ERLA            -                         TAQ                -

OR               ERLA        -(Relevant Usage)     TAQ          TAE

1. Now , Create Two Materials both with ERLA Item Category group.

2. Actually ,The Item Category "TAQ" is relevant for Pricing but "TAE" is not relevant for Pricing so ,You have to Put relevant for Pricing "X".

3. Create BOM with Two Materials in CS01 and Maintain Condition Records for both Materials.

4. Raise a Sales Order and Check Condition Tab.

Now , Check your Condition Tab , you can get Pricing for both Materials.

Request : Please consider my Previuos Post also.

If you have any doubts please let me know.

Thanks,

Naren

[former_member182378 · Accepted solution]

Narendra,

Thank you for your post!

I have done some changes (as you have suggested) to ZTAE (copy of TAE). Now there is pricing for both main item and sub item.

Side comment - In standard BOM we don't have pricing at both levels, but this scenario is not exactly BOM. But this requirement can be fulfilled with the BOM functionality.

[atgsd_atgsd · Accepted solution]

Dear TW,

I have tested this scenario everything is perfect up to delivery but while creating billing document system copying only main item C&B only but not scrap item.

Regards,

[atgsd_atgsd · Accepted solution]

Dear Narendra,

I have tested your scenario with item category group main and sub item is ERLA but desired result is not getting.

is there any thing have to change in copy controls. please send me the settings of copy controls for the sub items we have to set copy controls for sub item from VTFL or VTFA

Best Regards,

[former_member184065 · Accepted solution]

Hi,

Have you maintained Copying Control to Sub Item or not.If not Please make sure be Maintain VTFA settings and test it.

Side Comment : Please Untick Statistical in TAE of Sub Item.

Thanks,

Naren

[jignesh_mehta3 · Accepted solution]

Hello AGTSD,

Apart from what people has suggested above, What I suggest is if you do not want to track stock of Scrap, they why not handle this with a new Condition Type in Pricing Procedure?

The new Condition (say Scrap Surchrge) will add the cost of Scrap to total cost of the item, which will be Invoiced to Customer. You can also post this amount to seperate GL Account to track the Scrap amount received from Cusotmers.

Thanks,

Jignesh Mehta

[former_member182378 · Accepted solution]

ATGSD,

Have you tried by giving Billing relevance = A for both item categories (both items) in VOV7?

Unfortunately my above suggestion is incorrect and you would face the issue of only having the main item populate in the billing document.

The reason for this is that the sub-item, scrap is not a process with has delivery.

In the item category of the sub-item, try by putting Billing relevance = B order related billing.

1. create a sales order with main-item and sub-item

2. create delivery for main-item. do PGI

3. In VF01, give both the delivery number and sales order number and press enter.

Check if you are getting both the items (main and sub).

Check if you are facing some issue of invoice split

Side comment - Ravi, Jignesh and I have suggested to include a surcharge of scrap item in place of having a separate line item for scrap. What is your comment on this suggestion?

[Former Member]

Hi ATGSD ,

I Agree with G Lakshmipathi comment. Usually scrap sales will not considered as your regular revenue. In our scenerio, we created a dummy material (common for all scraps) with item category group LEIS. Whenever there is scrap sales we use this material. it is not relevent for delivery. It always hit different GL account (Not regular Sales Delivery GL account) which is controlled through AAG in material master. so they can account the scrap sales seperately.

I hope that the scrap sales process is not a day to day activity in your client's business process. It usually happens once in quarter or six months or yearly.

With Regards

Vinu Nanjan

[mathieu_chenot]

Hello,

I would create sales BOM with Main item as fictif bundle and two subitems (one for your main item and one for scrap). Each subitems has it owns item cat determination. One item is not stock material and item cat not relevant for delivery. One other item is stock material and relevant for delivery.

Main item as item category text.

Pricing is triggered on components.

Invoice has to be created in reference to sales order (as in delivery not all components will be copied).

[Lakshmipathi]

From my experience with couple of manufacturing industries, the process what they follow is whatever wastages they incur during productionizing, it will be treated as overhead expenses and based on this overhead cost only, selling price would be determined.  In that sense, you can check with your client finance team whether this option is okay.  Else, you can add one more line item for which you can differentiate by item category as sale order related billing and generate billing accordingly.  But for me, first option would be the best which many manufacturers follow.

G. Lakshmipathi

[former_member184555]

If you do not want to track the movement of scrap material..

then how about adding a surcharge condition type in your pricing procedure and charge the additional amount as surchage in the C&B material line item itself.

Regards,

Ravi Sankar

[suman_sardar2]

Hi ATGSD,

I think you can go for Sales BOM.

What you do for the Second line item use Material type DIEN-Service Material or NLAG-Non Stock Material.

So if you configure the Sales BOM in CS01 then for Delivery Stock Material FERT (Actual Sales Product) and in the sub item DIEN or NLAG will come in the Sales Order.

If you are using your item category then it should be Relevant for Pricing.

In this way it will be automatic pop up or else you can do it manually if you are not configuring the Sales BOM.

Please find the details of Sales BOM usage on the forum.

Thanks,

Suman