on 11-21-2012 3:50 AM
What is the process of scrapping using inventory management (PID) and what are the financial implications of this steps (including pros and cons of using the step rather than issue to scrap)
Thanks but would what would be the pros and cons of using PID for the scrapping process and how to distinguish it
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Using PID for scrap will move the inventory cost to a specified inventory adjustment G/L account, which then appears as any other inventory adjustment without differentiation of scrap vs. other reason for the adjustment. Further, there is often a reserve set for scrap and if the scrap is not processed using the appropriate scrap movement type (as Vijay provided), then the cost will not hit the appropriate account for scrap. Lastly, using PID for scrap can also negatively impact the reported inventory record accuracy metric.
It is best practice to use the appropriate movement types to ensure the costs move to the correct accounts.
Regards,
Moss
Hi,
In standard SAP, we can scrap the material using three movement types,
551-> withdrawl for scrapping from unrestricted -use stock
553-> withdrawl for scrapping from stock in quality
555-> withdrawl for scrapping from blocked stock
Scrapping causes a reduction in the stock and the value of scrapped material is posted from stock account to a scrap account.
Regards
Vijay
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