Scrap is material that does not conform to quality standards and which is not reworked . You can plan the scrap that is expected to be produced in the Logistics master data (in %) so that requirements planning can react with regard to production.Material requirements can be increased or reduced depending on the amount of scrap.
You can include the planned scrap quantity in the cost estimate and view it in the costed multilevel BOM .You can also see the costs for the planned scrap in the itemization.
You can plan various types of scrap:
Assembly scrap in the material master record (MRP view 1)
Component scrap in the material master record (MRP view 4) or in the BOM
Operation scrap in the BOM or routing
The different types of scrap have different effects:
Scrap in the material master or BOM increases the requirement of a component or all components of an assembly, and thus increases the material costs.
Scrap in the operation of a routing reduces the quantity of subsequent operations and thus reduces the production costs.
Costing includes the costs of planned scrap by creating the quantity structure (the BOM and routing) using the entries for scrap in the Logistics master data.The quantities and activities used are costed using this quantity structure.When you calculate the standard price for a material in a standard cost estimate, that price therefore contains the costs for planned scrap.
Scrap costs are assigned to the relevant cost components (such as raw material or machine costs) and can be shown separately for a material in the costed multilevel BOM.
It is not possible to plan scrap in the itemization (such as the cost estimate without quantity structure ).
You can also calculate scrap variances (that is, the value of unplanned scrap) when you calculate variances at period-end closing in Product Cost by Order and Product Cost by Period .This value is determined by valuating the scrap quantities with the amount of the actual costs less the planned scrap costs.You can settle the scrap variances to Profitability Analysis.
See also:
For more information, see the following sections in the SAP Library:
Cost Object Controlling: Scrap Variances , Addendum: Scrap in Product Cost Controlling
PP Routings
PP BOMs: Scrap Data
PP Requirements Planning
LO Management of Material Master Data