Scrap Generation in Subcontracting Urgent !!

[Former Member]

Hi Friends

In my scenario we send sheets which is raw material to vendor site and get some semifinish item. Here problem is with scap suppose i send 100 kg of raw material and 80 kg of material is consumed to manufacture semifinish so 20 kg of scrap left.And i get confirmation of scrap generation only when i receive my semifinish from vendor.Now i have question how to track scrap generation as i am not sure what quantity of scap will generate at the time of raising PO. So whats the possible solution to map this process.

Regards

Vivek

[Former Member]

Hi

In Sub contracting Scenario, While creating BOM itself, we have to give the approximate expected scrap qty. in negative value....

While you are doing the GR, the scrap material will be generated in 545 movement type and it will be lying at Vendor's Place....you have to get back this scrap material into company's stock in 542 movement type....

If the Vendor informs any generation of excess or less scrap, then you have to do subsequent settlement in MIGO.

Generation of less scrap will be adjusted in 546 movement type.

Reward if useful

Regards

S.Baskaran

[Former Member]

Hi,

there will be usually an agreement with your vendor on scrap generation which will be in percentage of base qty of the material, which usually is 2% max for steel industry. So you can take the max qty (%ge) as per conditions with your vendor and mention it in the PO as a bi-product ( -ve ) of subcon matrl.

At the time of GR you will recieve subcon matrl and bi-prod matrl, which you can transfer it to the scrap account.

Thanks & Regards

Anand.

Message was edited by:

Anand MM

[Former Member]

Hi Anand,

You are absolutely right presently we are doing in then same way as 2% as bi product in BOM but some times scrap cross this limit then how excess scrap material can be recorded in the system.

Regards

Vivek

[former_member218067]

Hi,

There can not be any solutuion to this you have to figure out the scrap generation

and assign that much qty in po as negative to track the scrap

BR

Diwakar