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Costing for shearing orders without BOM

Former Member
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The client is into sheet metal stamping. The input materials for pressing are steel sheets in different sizes. Each FG can be produced from only one specific sized sheet.

These sheets are ideally to be procured directly in the required cut sizes. But in case of unavailability of the sheets in the required size, and due to high requirements, these sheets are obtained by carrying out shearing activity. In this, the required cut sizes are obtained by shearing other larger size sheets. Also, some other off-cuts might be produced while carrying out the shearing.

This being the regular scene here, we have defined the sheets as HALB.

But the possibilities of making a particular sheet from the other available sheets are vast. Again from a single sheet many other sheets (as co-products) are possible to be manufactured along with scrap(as bi-product). This makes it impossible to make any BOMs for the particular sheet.

The problem for this scenario is in costing. We can create a order showing the material to be produced, the co-products and the bi-products (All entered manually in order) but we are not sure how the costing will happen.

The material being HALB is given the price control S, and being BOMs are not maintained, the prices are not updated through costing run.

We have tried with both the price controls S and V. In both cases the costs of the materials are not updated through production orders.

Can you suggest some answer as to how the costing of the sheets would happen?

Accepted Solutions (0)

Answers (1)

Answers (1)

Former Member
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Hi,

As per your issue, you are not maintainnig both Co product and By product in Header BOM. instead your are adding the both material during the prodution order creation.

But Prerequisites is for both, should be defined as line item for Header material Bom.

1.Co product cost will be inclued in production order

For costing of co product u have to defien apportionment structure in material master ,to specifiey how the total costs should be distributed over the main product and the co-products.

2.By product cost will be Deducted from Production order cost.

For details information see the following SAP link,

url=http://help.sap.com/saphelp_46c/helpdata/en/b1/c04fc6439a11d189410000e829fbbd/frameset.htm]Co product & By product[/url]

One more clarrification , for

" This makes it impossible to make any BOMs for the particular sheet" - why, if you shearing a sheet from larger one, u will have stock for required size sheet for Material .... why dont u create BOM...

once u create BOM it will solve your problem. if it usefull reward othrewise ignore

regards

pradeep

Former Member
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Hi,

For more information please check following links

Sap help link

http://help.sap.com/saphelp_46c/helpdata/en/b1/c04fc6439a11d189410000e829fbbd/frameset.htm

SDN link releated to C product costing.

please come back

regards

pradeep

Former Member
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Hi Pradeep,

You havent got my question. The problem is not with the co-products or the apportionment.

I will wxplore a bit...

See A B and C are the RM sheets in cut sizes and are purchased directly as RM with price control V.

If in case of emergency, I dont have stock of A, I will get it cut from C. RM B will come out of it as Co-Product with some scrap as biproduct.

Now, how i should configure this process in SAP? Because if i follow the above mentioned process the costs will not get updated through production orders.

If I put standard costing instead of V, I can not update the prices when i purchase the materials.

I think you got what i am asking.

Former Member
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Hi Sumeet

pls correct me if i have not understood ur problem correctly,

1> Normal scenerio : A B & C produce X(FG)

2> alternative scenerio : No stock of A , u cut A out of C , B comes as co-product of A & some scrap comes as bi -product.

in the above case what r u doing , u r producing X from C only ( correct me if i am wrong).

Now when u create a prodcution order for X : Actual bom of X has A , B & C let it be this way , so ur std costs r on the basis of the costs of A B & C , no coproduct or by product. In the production order components r A B & C from BOM.

Now when u do the confirmation or GI to the production order , if u have not produced X using A B & C & produced using C only delete the A & B line items and give the C quantity used only & gve the by product which was produced so that it comes to stock using movement type 561. This is about materials movement.

Now about costing.

ur std costs r on the basis or the std cost estimated calculated on the basis of prices or A B & C.

Ur actual costs = price of C consumed - by product cost which was produced

Varience ( which hits the price difference account) = std cost - actual cost

Hope this would be useful.

Thanks & regards

Prasad

Reward if useful.

Former Member
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No Prasad,

U have got it wrong..

Let me tell you.

This is a sheet metal industry. FGs are the press components for ehich only one input sheet is required. Now there are more than 200 such products, all of which needs sheets in different grades and sizes.

Now a particular sheet is not available, it can be made available by cutting a bigger sized sheet. But to produce this sheet there are large number of possibilities.

Again even if I produce a particular sheet from the same sheet every time, the co-products are not fixed. The co-products are decided as and when the shearing opeartion is done depending upon the requirements.which is why i am not keeping any standard BOM for this.

So this is the scenario. The client decides about the input and outputs of the shearing when actual it is being taken for production.

Sumeet

Former Member
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Hi Sumeet

What i ment to say was dont go by co-product consept it will complicate the whole process. As u said one sheet can produce one FG , so declare a bom with one sheet , when u actually create that FG u may not use the material declared in the bom but use some other material, consume that material , what will happen at max u get a larger varience that's it right, which can be shown.

regards

Prasad

Former Member
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Dear Prasad,

Thats OK.

Varience to some limit is acceptable. But the same procedure is creating the stocks of other materials also, which will be used to create other FGs.

The stocks will be all mess in this case.

Not applicable !!

Former Member
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I think I am working with a similar situation. We cut beams down to particular sizes. We have a separate optimizer program that tells us what sizes to cut from. So we make materail X from any number of other materisl (A, B, C, D, E, ...) and no BOMs are possible.

Our costing solution is to maintain BOMs that are costing relevant only. The longest beam, which could never be cut, has a moving average price. We then take a percentage of that beam's cost to figure out the cost of all of the shorter pieces.

It's not a perfect solution, but it's the best we could find.