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Scrap Calculation

This WIKI page aims at providing an overview of various scraps involved in day to day Production & Procurement activities, their dependencies and the calculation  of scrap quantities.

Content

6. Scrap Calculation

Scrap

• Non-conforming material that cannot be reworked or used and has no value except for its material content.

Types of Scrap

The following are the various scraps that are maintained

1. Assembly Scrap
2. Component Scrap
3. Operation Scrap

Assembly Scrap

• Percentage scrap that occurs during production of the material if the material is an assembly.
• Takes into account all faults that occur when the individual components of an assembly are assembled (in production).
• Maintained in the Material Master - MRP 1 View as percentage
• Assembly scrap is used in materials planning to calculate the lot size of the assembly. The system increases the quantity to be produced by the scrap quantity calculated.

Dependency:

• The system increases the quantity to be produced for all of the assembly's components accordingly.

Assembly Scrap-MRP1 View

Assembly Scrap Calculation

• Let the material master record of header material FERT contains an 10% of assembly scrap. The subordinate component ROH quantity will be calculated as below to include the scrap.

The resulting component quantities for ROH is calculated for 1,100 pieces of assembly FERT.

Component Scrap

• Percentage of scrap that occurs during production of the material if the material is a component. It takes into account all faults that occur before the component is put into an assembly (material provision scrap).
• Applies only to one component
• Component scrap can be maintained

- In the BOM on the Item detail screen: basic data under Quantity data. This component scrap is only relevant to the individual BOM.

- In the material master record on the MRP 4 screen under Requirements explosion. If the same component scrap applies to a material in a number of BOMs, then it can be maintained in the material master record.

• Component scrap is used in material requirements planning (MRP) to determine the quantities of components required. When exploding the bill of material (BOM), the system increases the required quantities of the components by the calculated scrap quantity

Component Scrap - Dependencies

• Component scrap maintained for a material component in a BOM overrides the component scrap maintained in the material master record.
• If there is also assembly scrap for a higher-level assembly, the system adds together the two types of scrap

BOM Item detail screen: Basic data

• If the component scrap is only relevant to the individual BOM, then it can be maintained in the BOM Item detail screen

Component Scrap - MRP4 View

• If the same component scrap applies to a material in a number of BOMs, then it can be maintained in the material master record.

Component Scrap Calculation
If a component scrap of 10% is maintained for the material component ROH in the BOM, then the component quantity will be calculated to include the scrap as below.

Component Scrap & Assembly Scrap

Assembly scrap of 10% is maintained in the material master record of assembly FERT.

In BOM, component scrap of 10% is maintained for a material component ROH. The component quantity will be calculated as below to include the scrap.

If an adjusted required quantity of 1,100 pieces of FERT is to be produced, then 1,210 pieces of component ROH are required.

Operation Scrap

• Scrap that is expected in one operation for the quantity of a component to be processed
• Used to override the assembly scrap for materials of high value
• If operation scrap is maintained, situations where too much of the material is planned in MRP for the components of subsequent operations can be avoided
• If an entry for Operation scrap is made, then Net Scrap Indicator must be set to active
• Applies to only one component

Operation Scrap - BOM Item detail screen: basic data

Net Scrap Indicator

• Determines whether scrap for the component is calculated on the basis of the net required quantity (the required quantity without assembly scrap from the material master record).
• Must be set to exclude Assembly scrap
• Must be set to override assembly scrap with operation scrap
• Can be set if only component scrap is entered, to calculate scrap on the basis of the net required quantity for the assembly

Net Scrap Indicator - BOM Item data

Operation Scrap Calculation

Operation scrap is maintained as 1% for one of the component ROH2 in the BOM. This component is also subject to assembly scrap of 10%. For 1000 pieces of FERT assembly, the following is the scrap calculation for component quantities.

Scrap Calculations

Scrap calculation depends on the entry of various scraps (Assembly, Component & Operation scrap) for the Assembly & Component Material and also influenced by Net Scrap Indicator in the BOM Item detail.

Master data:

The following are the scrap quantities calculated for the above master data:

**** END OF THE DOCUMENT ****Regards,
Keerthi

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