Byproduct And Co Product Final Theory 545sn
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ALWAYS CHECK FOR ROUTING –OPEB (RATE ROUTING OR NORMAL ROUTING) Products that are usually manufactured together can now be produced using one production order, but with separate settlement. One product is regarded as the main product and the remaining products are described as coproducts. The system automatically creates a separate order item for each of the co-products. If you look at a petro chemical refining industry their main input material will be "Crude oil" during refining they get "Petrol", "Diesel", "Kerosene", "Naptha" & "Water" etc... So the whole of the production cost should not go to "Petrol" alone, as Diesel, Kerosene and "Naptha" are also salable. Water is not sold out, but is being used internal for the operation. In this scenario "Petrol"."Diesel", "Kerosene" and "Naptha" are defined as coproducts in the material master. And the cost which needs to be disrtibuted among them are in the ratio 30:30:20:20, so in the t production details we select the apportionment structure, and here we define the equivalence number by entering the materials and numbers as required by us as 30:30:20:20. Now BOM is defined for the main product "Petrol" and Diesel", "Kerosene", "Naptha" and Water are defined in -ve quantity. Here the definItion of water goes as "BiProduct". Crude oil is defined as component in +ve quantity. Now during order costing/product costing/settlement considers the entire cost of production based on the crude oil cost and infrastructure cost and it splits into the ratio defined in the equivalence number.
If Petrol & Diesel is produced from different process then yes, if not a single BOM. As described by me except "Crude Oil" and "Water" remaining all materails needs to be defined as Coproducts. Eg2: Sugar cane is used for manufacturing sugar, in the process we get mollasses, mud & bagasse as a by product. Products that are usually manufactured together can be produced using one production order. The main product is the primary reason for the production process. It is displayed in the production order header. The system also creates a separate order item for the main product. A co-product is a product that is produced in conjunction with other products. The system creates a separate order item in the production order for each co-product. As a result, it is possible to display actual costs at co-product level. A by-product is a product that is produced in conjunction with other products. The system does not create a separate order item for each by-product. The material valuation of a by-product is always based on the price specified by price control in the material master. Creating a production order to manufacture co-products has the following advantages: Main product and co-product(s) are settled to different receivers Goods movements can be posted simultaneously for all products manufactured in the order The following prerequisites must be fulfilled if you want to create a production order with co-products or by-products. Prerequisite for the main product: 1. The indicator Co-product must be activated in the material master of the main product (MRP area)
2.Prerequisites for a co-product: i) The indicator Co-product must be activated in the material master of the co-product (MRP area) ii) The co-product must be listed as an item in the bill of material of the main product iii) On the Basic data tab page of the BOM item, the indicator Coproduct must be activated in the field group General data. iv)Co-Product always a negative value sign in bom (qty -) 3.Prerequisites for a by-product: The by-product must be listed as an item in the bill of material of the main product The bill of material item must have a negative quantity (for example 1 -). In the PP By and CO product is the same, You need the negative Qty in BOM. Material Master, you need to tick the t Poduction in the CO Product, not for By Product. The Main diff is in Product costing, By product take the Price in Material master ing view, Multiply QTY, and deduct that from the total Production order cost. So By Product deduct the same amount (if the Material price of By product remains the same) no matter total cost in production order is going up or down Co Product, In turn, you need to setup the percentage, of cost sharing, in this case if the Total production order cost is going up, Co product cost also goes up. 1.cretion of production costs cost element group-(kah1) PKLPRODN
2.Create Source Structure in SPRO- A1
By using a source structure, you can enter different equivalence numbers for different cost element groups within the same apportionment structure. Example of equivalence numbers with source structure
Cost element grp
Main product Co-product
Material costs
2
1
Overhead
5
3
Production costs 1
4
Spro
Doubleclick on source folder Select new entries button Cost element: from 400000 to 400099Save Select assignment 2-overhead Doubleclick on source folder Select new entries button Cost element: from 1100000 Save Select assignment 3-production costs Doubleclick on source folder Select new entries button Cost element group:pklprodn Save If you do not use a source structure, the cost distribution must be the same for all cost element groups in the apportionment structure: Example of equivalence numbers without source structure Cost element grp
Main product Co-product
Production costs 2
1
Material costs
2
1
Overhead
2
1
3. Assign the Allocation Structure to your Production Order Settlement profile and on the Settlement Profile Check Mark on Equivalence Number and Enable to Profile for
Order Item Spro
5.after creating goto change mode In mrp select t production buttonFor material 105451 Plant:pklp No. description structure 1 pkl structure select 1 Select equivalence numbers button: Material 105451 Plant PKLP Apportionment Struct 1 AssText 1 material costs 1 material costs 2 overheads 2 overheads 3 production costs 3 production costs
Co-product 105451 105452 105451 105452 105451 105452
Valid to EqNo 31.03.2012 2 31.03.2012 1 31.03.2012 2 31.03.2012 1 31.03.2012 1 31.03.2012 1
Enter and save
-2.CREATION OF BOM
105451
CS01
FOR MATERIAL 105452-IN BASIC DATA TAB SELECT CO PRODUCT CHECK BOX
3.Creation of routing –ca01 4.Creation of cost estimate with quantity structure-ck11nFor Material No. 105451 5.marking and releasing
6.Creation of production order-co01-100000059 7.Goods issue to production order mb1a 8.Actual overhead calculation-KGI2 9.Confirmation of production order:co11n 10.goods receipt-mb31 You will get the GR qty for main production and co-product while doing MB31, 101 for the order of the header material 11.By-product receipt-MB1C Movt type:531
5.order type pp01-settlement profile-allocation structure a1 6.CREATION OF PRODUCTION ORDER CO01 7.GOODS ISSUE MB1A 8.ACTUAL OVERHEAD CALCULATION KGI2 9.CONFIRMATION OF PRODUCTION ORDER CO11N 10.goods receipt mb31 movt type 101 11.byproduct receipt mb1c movt type 531 12.TO MAKE PRODUCTION ORDER TECHNICALLY COMPLETE 13.CALCULATION OF VARIANCES KKS2
100000057
CO02
2. Mollasses, mud & Bagasse are used in the separate plants as a raw material for manufacturing different products like alcohol, power etc. In sugar mfg, i have created sugar cane as RM & sugar as a FG material masters. In BOM, we'll define mollasses,mud & bagasse as a by product with -ve quantity. You need to create Mud, Bagase and Molasses as Mat masters... Only then you can include them in the BOM as -ve qty... I dont think CO products is the right option. You need to treat it as a by product...
For Co-Products do the following settings. 1. Select Co-Product indicator in MRP2 view for header material as well as for co-product materials. 2. Define the co-products as BOM components. 3. Give negative quantity in the BOM for co-products Also select co-product indicator by clicking on BOM item details and in the Basic Data Tab. 4. To calculate the production cost of co-products give equivalence numbers in MRP2 view by clicking t Production push button or you can give the same in the settlement rule in the Production order by clicking Header menu - Settlement rule. For By Products 1. Donot set the co-product indicator any where. 2. Define the By-Products as BOM components and give negative qty.
I have scenario regarding Co Product and By Product in my client place. May I know that what is the Co Product and By Product concept in Controlling module and how valuation and standard prices happened. Please let me know what are the configuration required. You need to define follwoing Setting for Co Product: 1. Create Source Structure in SPRO 2. Assign the Source Structure to your Production Order Settlement profile and on the Settlement Profile Check Mark on Equivalence Number and Enable to Profile for Order Item 3. On your main Material Master Costing 1 Tab check mark Co Product Option , click on t Production, give the Number and select the Source Structure and click on Equivalance Number button on the same screen, Enter your main product and Co Product define the Equivalnce Number For Example Main Product and Co Product ratio is 55:45 so you haev to define both numbers 4. In BOM check Co Product and the Qty of your Co Product the Qty will be in Negative. Once You create Production Order system will show two line Items as OIT for both the materials. In case of Co-product costs are settled with a apportionment structure( Define in MRP2 View - t Production).
In case of By-product the price of this by-product is credited to the order or the material stock of the lead material being manufactured. Main difference betn the two is costing co product has a resonable prize but by-product has low(minimal) prize. Co-Product as well as by-product are defined as BOM Components/Items. Both of them have negative quantities. When BOM is created for FERT , you can see one indicator in COMPONENT DETAILS screen for co-product. You need to define the co-products with this special indicator . E.g - Edible oil processing - Fat is seperated from main product oil, fat can ba a by product Petroleum Crude Oil processing - Crude oil process for petrol, diesel & kerosene production. That can come under the co product. Co-product VS By-product - Receive via movement type 101/receive via movement type 531 - Must be planned in production order/can be received as unplanned - Split the costs of the output using equivalent number or percentage/Deduct (credit) the input costs - Estimate standard costs of co-products is possible/must put the value manually - Then can calculate variance per co-product/cannot perform variance analysis For Co-Products do the following settings. 1. Select Co-Product indicator in MRP2 view for header
material as well as for co-product materials. 2. Define the co-products as BOM components. 3. Give negative quantity in the BOM for co-products Also select co-product indicator by clicking on BOM item details and in the Basic Data Tab. 4. To calculate the production cost of co-products give equivalence numbers in MRP2 view by clicking t Production push button or you can give the same in the settlement rule in the Production order by clicking Header menu - Settlement rule. 5. You will get the GR qty for co-products while doing MB31, 101 for the order of the header material For By Products 1. Donot set the co-product indicator any where. 2. Define the By-Products as BOM components and give negative qty. product is the same, You need the negative Qty in BOM. Material Master, you need to tick the t Poduction in the CO Product, not for By Product. The Main diff is in Product costing, By product take the Price in Material master ing view, Multiply QTY, and deduct that from the total Production order cost. So By Product deduct the same amount (if the Material price of By product remains the same) no matter total cost in production order is going up or down Co Product, In turn, you need to setup the percentage, of cost sharing, in this case if the Total production order cost is going up, Co product cost also goes up.
Now coming to its valuation - Their price control is usually S and the standard cost for them is maintained manually from MR21... When the by products are received into inventory from production order, the total cost of sugarcane issued to the production order will get reduced accordingly i.e. Cost of Sugar = Cost of Sugarcane - (Qty of bagase/mud/molasses * Std cost) + Other overheads I have scenario regarding Co Product and By Product in my client place. May I know that what is the Co Product and By Product concept in Controlling module and how valuation and standard prices happened. Please let me know what are the configuration required. You need to define follwoing Setting for Co Product:
1. Create Source Structure in SPRO 2. Assign the Source Structure to your Production Order Settlement profile and on the Settlement Profile Check Mark on Equivalence Number and Enable to Profile for Order Item 3. On your main Material Master Costing 1 Tab check mark Co Product Option , click on t Production, give the Number and select the Source Structure and click on Equivalance Number button on the same screen, Enter your main product and Co Product define the Equivalnce Number For Example Main Product and Co Product ratio is 55:45 so you haev to define both numbers 4. In BOM check Co Product and the Qty of your Co Product the Qty will be in Negative. Once You create Production Order system will show two line Items as OIT for both the materials.
By product is the product which will be creaed while making production you have to maintain the setting in BOM with negative quantity (-). Then system automatically will pick this as by prodcut. movement type 531 to post the by-product during confirmation. Settlement of cost will be done to the header of material. Co product is the product You have to activate check box in MRP2 view for co product. Co-Products Products that are usually manufactured together can be produced using one production order.
The main product is the primary reason for the production process. It is displayed in the production order header. The system also creates a separate order item for the main product. A co-product is a product that is produced in conjunction with other products. The system creates a separate order item in the production order for each co-product. As a result, it is possible to display actual costs at co-product level. A by-product is a product that is produced in conjunction with other products. The system does not create a separate order item for each by-product. The material valuation of a by-product is always based on the price specified by price control in the material master. Creating a production order to manufacture co-products has the following advantages: Main product and co-product(s) are settled to different receivers Goods movements can be posted simultaneously for all products manufactured in the order The following prerequisites must be fulfilled if you want to create a production order with co-products or by-products. Prerequisite for the main product: i) The indicator Co-product must be activated in the material master of the main product (MRP area) Prerequisites for a co-product: i) The indicator Co-product must be activated in the material master of the co-product (MRP area) ii) The co-product must be listed as an item in the bill of material of the main product
iii) On the Basic data tab page of the BOM item, the indicator Co-product must be activated in the field group General data. Prerequisites for a by-product: i) The by-product must be listed as an item in the bill of material of the main product ii) The bill of material item must have a negative quantity (for example ‘1 -’). Co-Product Configuration for following scenario: Product A (Parent Material / Input Material), Product B, C and D are child materials (output materials). During manufacturing of Product B, we get 40% of Product D and the remaining 60% will be product B. Product is C is not the co-product, it always gets produced for 100%. Solution: Product B is the one you are trying to manufacture in the production process. And while doing so, the input material is A and Product D is produced. In this process Product C always gets produced. B & D are co-products. C is the by-product according to the definition of these by SAP. And A is the input material. Please create the BOM for B in which A will be having a +ve qty and C & D will have -ve qty. First, you have to create the BOM for B instead of A, since B is the one getting manufactured and not A. A will be either procured or manufactured in a different process. You will define BOM for A only for the process, which manufactures A. We have to check Co-product indicator in Material Master (MRP2 View) for Product B and D.
Product B and D should have co-product checked in their "Basic Data" tab of BOM View (BOM view of Product A, I mean). For C you will have to tick the check box Fixed Price Co-Product in the Material Master Costing 1 view. We have to have Apportionment structure in MRP2 View (t Production Button) for Product B only, and that apportionment structure (assuming we don't use Source Structure) with equivalence number will have 2 products product B with equ. number = 60 and Product D with 40 In case of Co-product costs are settled with a apportionment structure. In case of By-product the price of this by-product is credited to the order or the material stock of the lead material being manufactured. Co-Product as well as byproduct are defined as BOM Components/Items. Both of them have negative quantities. ( Not all negative quantity items fall under these categories!). When BOM is created for FERT , you can see one indicator in COMPONENT DETAILS screen for co-product. You need to define the co-products with this special indicator
1. Select Co-Product indicator in MRP2 view for header material as well as for co-product materials. 2. Define the co-products as BOM components. 3. Give negative quantity in the BOM for co-products Also select co-product indicator by clicking on BOM item details and in the Basic Data Tab. 4. To calculate the production cost of co-products give equivalence numbers in MRP2 view by clicking t Production push button
or you can give the same in the settlement rule in the Production order by clicking Header menu - Settlement rule. 5. You will get the GR qty for co-products while doing MB31, 101 for the order of the header material For By Products 1. Donot set the co-product indicator any where. 2. Define the By-Products as BOM components and give negative qty. In case of Co-product costs are settled with a apportionment structure. In case of By-product the price of this by-product is credited to the order or the material stock of the lead material being manufactured. So you cannot post an automatic goods receipt for co-products. Co-Product as well as by-product are defined as BOM Components/Items. Both of them have negative quantities. When BOM is created for FERT , you can see one indicator in COMPONENT DETAILS screen for co-product. You need to define the co-products with this special indicator . 101 movement will take place for the material of which production order of the material is created and in case of coproduct you are creating production order of only one material and the other material gets created simultaneously for which no need of creating seperate order or production planning.. that is the reason auto GR is not possible for co-product.
Yes you are right if a materail is coproduct, you need to activate the coproduct check box in material master MRP2 view. Also in the BOM you need to define this material in -ve quantity. For coproducts we also need to define the apportionate structure with equivalence number for costing purpose, this will be done in "t Production" details in the
same view. Biproduct has only the -ve quantity in BOM component, it does not go for t production costing. Process Orders with Co-Products: Prerequisites
*Activate the indicator *Co-product in the material master of the co-product (MRP 1 screen).
The co-product must exist as a component in the material list (BOM's equivalent in process order set up) of the main product (negative quantity, item type L).
The indicator Co-product must be activated in the General data screen of the material component.
If you create an order to manufacture more than one product (co-products), the system generates an order item for each co-product. Settlement is then in two stages: 1. The costs for the order are distributed per the settlement rule for the order header to the order items. The equivalences for this distribution can be proposed using an apportionment structure entered in the material master record. 2. If you have set status "Delivered" or "Technically closed" for the order item, the difference between the value from the apportionment and the credit posting at the time of delivery is settled to stock. Co-Products: Costs The costs for the orders are assigned to the order header and then distributed to the individual co-products according to equivalence numbers. Note: You specify an apportionment structure in the material master of the main product. The apportionment structure specifies how the total costs should be distributed over the main product and the co-products.
Based on this data, the system creates the following when a process order is created:
One settlement rule that distributes the total order costs over the main product and the co-products (i.e. over the individual order items) One settlement rule per item that assigns the costs to stock At present, it is only possible to distribute actual costs. Co-Products: Using a Source Structure - Optional By using a source structure, you can enter different equivalence numbers for different cost element groups within the same apportionment structure. Example of equivalence numbers with source structure Cost element grp
Main product
Co-product
Production costs 1
4
Material costs
2
1
Overhead
5
3
Here, the cost distribution varies between the cost element groups in the apportionment structure. If you do not use a source structure, the cost distribution must be the same for all cost element groups in the apportionment structure: Example of equivalence numbers without source structure Cost element grp
Main product
Production costs 2
Co-product 1
Material costs
2
1
Overhead
2
1
CONFIGURATION REQUIREMENT- OPTIONAL If you want to work with a source structure, you need to: 1. Define a source structure in Customizing. After this, define an apportionment structure in the material master of the main product. 1. Go to the MRP 1 Tab of material master of the main product. 2. Select the function key 'Co-prod. manufacture'.The system then displays a dialog box in which you can enter apportionment structures. Labels parameters
Posts: 409 ed: 5/31/06 Forum Points: 1,442
Re: Co-Products Posted: Jul 31, 2006 11:08 AM in response to: Shridhar Deshpa... Hi,
Repl y
In the PP By and CO product is the same, You need the negative Qty in BOM. Material Master, you need to tick the t Poduction in the CO Product, not for By Product. The Main diff is in Product costing, By product take the Price in Material master ing view, Multiply QTY, and deduct that from the total Production order cost. So By Product deduct the same
amount (if the Material price of By product remains the same) no matter total cost in production order is going up or down Co Product, In turn, you need to setup the percentage, of cost sharing, in this case if the Total production order cost is going up, Co product cost also goes up. Hope this helps. Thanks, Viswanath
Posts: 549 ed: 3/23/06 Forum Points: 404
Re: Co-Products Posted: Aug 1, 2006 7:43 AM in response to: Kasi Viswanath Hai Viswanath,
Repl y
Thanks. Let me consider as By-product. Shall i create this Mollases as Finished product or semi finished product? My actual finished product is sugar. If i suppose consider Mollases also as finished product, Is it possible to assign this mollases(consider as finished product) into my actual finished product "Sugar" BOM? Whether should i consider this mollases as semi finished or finisheed? If i consider this mollases as semi finished, is it possible to create Sales order this mollases? My strategy is: Make to stock production.
Please guide me on this. Thanks Senthil
Posts: 10 ed: 12/4/07 Forum Points: 0
Re: Co-Products Posted: Jul 25, 2008 4:57 PM in response to: Shridhar Deshpa...
Repl y
Hi For your query I`m giving my opinion. Mollesses can be created as semifinished product, if your client produces or uses this mollassess for manufacturing any other product other you can create a mollasses as finished product. In either case you can create sales order. But if you create Mollasses as finished product, then you cannot use as mollasses as child material to include in the BOM Hope this explanation will help to solve your query. Regards, Surya
Posts: 4,829 ed: 5/8/07 Forum Points: 13,402
Re: Co-Products Posted: Jul 25, 2008 11:46 PM in response to: Shridhar Deshpa...
Repl y
Hi, Do not worry whether you can sell FG /
SFG, create FG as BOM items, these things depend only on your setting. - If you want to sell goods, you need sales view allowed for material type (SPRO > Logistics - General > Material Master > Basic Settings > Material Types > Define Attributes of Material Types) - If you want a material type allowed as item in BOM: SPRO > Production > Basic Data > BOM > Item Data > Define Allowed Material Types for BOM items. An impoertant difference between coproduct and by-product is that by-product can be confirmed automatically (and you assign it to operation) but co-product can be confirmed only via MB31+PrdOrd reference, not assigned to operation. Some settings are also different (coproducts indicator, proportion rate). BR Csaba
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Pavanakumar Posts: 444 ed: 3/15/07
Forum Points: 302
Top of Form By product / Co product : Reg
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Posted: May 8, 2009 11:41 AM
Hi, I am working with t production and have some issues related to same. 1 - I have created a production order with one co product and one by product. But when I do the goods receipt, in MB31, by product is not appearing during goods movement. 2 - During WIP calculation I am always getting values as zero. Even though system is not showing any errors. 3 - System is not identifying any Settlement Rules automatically when I create production order. 4 - Even when I maintain settlement rule with equivalence no.s, system shows settlement only for the main product but co product and by product is not appearing at all, Can you guide me to resolve these issues. Pavan
Re: By product / Co product : Reg Posts: 4,168 ed: 8/31/08
Forum Points: 5,908
Posted: May 8, 2009 11:44 AM to: Pavanakumar
Reply
in response
Hi, in case of By-Product, while confirmation system posts by-product by 531 movement type in case of co-product, while taking GR for header order system does GR for ur co-product Regards kumar
Re: By product / Co product : Reg Posts: 4,852 ed: 9/1/06
Forum Points: 11,488
Posted: May 8, 2009 11:55 AM to: Pavanakumar
Reply
in response
Pavan, Bi-Product GR would happen during confirmation/backflush or during MB1A goods Issue. Bi-Product cannot be a reciever for Settlement. Please go through my thread Bi-Products and Co Products Regards, Prasobh Re: By product / Co product : Reg
Posts: 429 ed: 6/26/08
Forum Points: 1,366
Posted: May 8, 2009 12:52 PM response to: Pavanakumar
Reply
in
Hi 1) Co - Products will be posted in to stock with 101 and byproducts with 531 hence you can't post a by product in MB31 3) Assign the settlement Profile in OPJH per order type then u will get the settlement rule copied to Order 4) For the main product and co-product tick co-product check box and for Main product in MRP-II view in t Production tab assign source structure In the source structure maintain both material no of main & coproduct , valid to and eq no Regards Brahmaji Re: By product / Co product : Reg
Posts: 444 ed: 3/15/07
Forum Points: 302
Posted: May 8, 2009 12:57 PM to: Prasobh Karunak...
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in response
Hi, Thanks for your reply. What about order settlement, any idea why system is not creating settlement rules. ( for both main product and co product) and Why during WIP calculation all the values are zero??? Pavan Re: By product / Co product : Reg
Posts: 444 ed: 3/15/07
Forum Points: 302
Posted: May 8, 2009 1:10 PM to: Brahmaji Devara...
hi,
in response
Reply
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If Petrol & Diesel is produced from different process then yes, if not a single BOM. As described by me except "Crude Oil" and "Water" remaining all materails needs to be defined as Coproducts. Eg2: Sugar cane is used for manufacturing sugar, in the process we get mollasses, mud & bagasse as a by product. Products that are usually manufactured together can be produced using one production order. The main product is the primary reason for the production process. It is displayed in the production order header. The system also creates a separate order item for the main product. A co-product is a product that is produced in conjunction with other products. The system creates a separate order item in the production order for each co-product. As a result, it is possible to display actual costs at co-product level. A by-product is a product that is produced in conjunction with other products. The system does not create a separate order item for each by-product. The material valuation of a by-product is always based on the price specified by price control in the material master. Creating a production order to manufacture co-products has the following advantages: Main product and co-product(s) are settled to different receivers Goods movements can be posted simultaneously for all products manufactured in the order The following prerequisites must be fulfilled if you want to create a production order with co-products or by-products. Prerequisite for the main product: 1. The indicator Co-product must be activated in the material master of the main product (MRP area)
2.Prerequisites for a co-product: i) The indicator Co-product must be activated in the material master of the co-product (MRP area) ii) The co-product must be listed as an item in the bill of material of the main product iii) On the Basic data tab page of the BOM item, the indicator Coproduct must be activated in the field group General data. iv)Co-Product always a negative value sign in bom (qty -) 3.Prerequisites for a by-product: The by-product must be listed as an item in the bill of material of the main product The bill of material item must have a negative quantity (for example 1 -). In the PP By and CO product is the same, You need the negative Qty in BOM. Material Master, you need to tick the t Poduction in the CO Product, not for By Product. The Main diff is in Product costing, By product take the Price in Material master ing view, Multiply QTY, and deduct that from the total Production order cost. So By Product deduct the same amount (if the Material price of By product remains the same) no matter total cost in production order is going up or down Co Product, In turn, you need to setup the percentage, of cost sharing, in this case if the Total production order cost is going up, Co product cost also goes up. 1.cretion of production costs cost element group-(kah1) PKLPRODN
2.Create Source Structure in SPRO- A1
By using a source structure, you can enter different equivalence numbers for different cost element groups within the same apportionment structure. Example of equivalence numbers with source structure
Cost element grp
Main product Co-product
Material costs
2
1
Overhead
5
3
Production costs 1
4
Spro
Doubleclick on source folder Select new entries button Cost element: from 400000 to 400099Save Select assignment 2-overhead Doubleclick on source folder Select new entries button Cost element: from 1100000 Save Select assignment 3-production costs Doubleclick on source folder Select new entries button Cost element group:pklprodn Save If you do not use a source structure, the cost distribution must be the same for all cost element groups in the apportionment structure: Example of equivalence numbers without source structure Cost element grp
Main product Co-product
Production costs 2
1
Material costs
2
1
Overhead
2
1
3. Assign the Allocation Structure to your Production Order Settlement profile and on the Settlement Profile Check Mark on Equivalence Number and Enable to Profile for
Order Item Spro
5.after creating goto change mode In mrp select t production buttonFor material 105451 Plant:pklp No. description structure 1 pkl structure select 1 Select equivalence numbers button: Material 105451 Plant PKLP Apportionment Struct 1 AssText 1 material costs 1 material costs 2 overheads 2 overheads 3 production costs 3 production costs
Co-product 105451 105452 105451 105452 105451 105452
Valid to EqNo 31.03.2012 2 31.03.2012 1 31.03.2012 2 31.03.2012 1 31.03.2012 1 31.03.2012 1
Enter and save
-2.CREATION OF BOM
105451
CS01
FOR MATERIAL 105452-IN BASIC DATA TAB SELECT CO PRODUCT CHECK BOX
3.Creation of routing –ca01 4.Creation of cost estimate with quantity structure-ck11nFor Material No. 105451 5.marking and releasing
6.Creation of production order-co01-100000059 7.Goods issue to production order mb1a 8.Actual overhead calculation-KGI2 9.Confirmation of production order:co11n 10.goods receipt-mb31 You will get the GR qty for main production and co-product while doing MB31, 101 for the order of the header material 11.By-product receipt-MB1C Movt type:531
5.order type pp01-settlement profile-allocation structure a1 6.CREATION OF PRODUCTION ORDER CO01 7.GOODS ISSUE MB1A 8.ACTUAL OVERHEAD CALCULATION KGI2 9.CONFIRMATION OF PRODUCTION ORDER CO11N 10.goods receipt mb31 movt type 101 11.byproduct receipt mb1c movt type 531 12.TO MAKE PRODUCTION ORDER TECHNICALLY COMPLETE 13.CALCULATION OF VARIANCES KKS2
100000057
CO02
2. Mollasses, mud & Bagasse are used in the separate plants as a raw material for manufacturing different products like alcohol, power etc. In sugar mfg, i have created sugar cane as RM & sugar as a FG material masters. In BOM, we'll define mollasses,mud & bagasse as a by product with -ve quantity. You need to create Mud, Bagase and Molasses as Mat masters... Only then you can include them in the BOM as -ve qty... I dont think CO products is the right option. You need to treat it as a by product...
For Co-Products do the following settings. 1. Select Co-Product indicator in MRP2 view for header material as well as for co-product materials. 2. Define the co-products as BOM components. 3. Give negative quantity in the BOM for co-products Also select co-product indicator by clicking on BOM item details and in the Basic Data Tab. 4. To calculate the production cost of co-products give equivalence numbers in MRP2 view by clicking t Production push button or you can give the same in the settlement rule in the Production order by clicking Header menu - Settlement rule. For By Products 1. Donot set the co-product indicator any where. 2. Define the By-Products as BOM components and give negative qty.
I have scenario regarding Co Product and By Product in my client place. May I know that what is the Co Product and By Product concept in Controlling module and how valuation and standard prices happened. Please let me know what are the configuration required. You need to define follwoing Setting for Co Product: 1. Create Source Structure in SPRO 2. Assign the Source Structure to your Production Order Settlement profile and on the Settlement Profile Check Mark on Equivalence Number and Enable to Profile for Order Item 3. On your main Material Master Costing 1 Tab check mark Co Product Option , click on t Production, give the Number and select the Source Structure and click on Equivalance Number button on the same screen, Enter your main product and Co Product define the Equivalnce Number For Example Main Product and Co Product ratio is 55:45 so you haev to define both numbers 4. In BOM check Co Product and the Qty of your Co Product the Qty will be in Negative. Once You create Production Order system will show two line Items as OIT for both the materials. In case of Co-product costs are settled with a apportionment structure( Define in MRP2 View - t Production).
In case of By-product the price of this by-product is credited to the order or the material stock of the lead material being manufactured. Main difference betn the two is costing co product has a resonable prize but by-product has low(minimal) prize. Co-Product as well as by-product are defined as BOM Components/Items. Both of them have negative quantities. When BOM is created for FERT , you can see one indicator in COMPONENT DETAILS screen for co-product. You need to define the co-products with this special indicator . E.g - Edible oil processing - Fat is seperated from main product oil, fat can ba a by product Petroleum Crude Oil processing - Crude oil process for petrol, diesel & kerosene production. That can come under the co product. Co-product VS By-product - Receive via movement type 101/receive via movement type 531 - Must be planned in production order/can be received as unplanned - Split the costs of the output using equivalent number or percentage/Deduct (credit) the input costs - Estimate standard costs of co-products is possible/must put the value manually - Then can calculate variance per co-product/cannot perform variance analysis For Co-Products do the following settings. 1. Select Co-Product indicator in MRP2 view for header
material as well as for co-product materials. 2. Define the co-products as BOM components. 3. Give negative quantity in the BOM for co-products Also select co-product indicator by clicking on BOM item details and in the Basic Data Tab. 4. To calculate the production cost of co-products give equivalence numbers in MRP2 view by clicking t Production push button or you can give the same in the settlement rule in the Production order by clicking Header menu - Settlement rule. 5. You will get the GR qty for co-products while doing MB31, 101 for the order of the header material For By Products 1. Donot set the co-product indicator any where. 2. Define the By-Products as BOM components and give negative qty. product is the same, You need the negative Qty in BOM. Material Master, you need to tick the t Poduction in the CO Product, not for By Product. The Main diff is in Product costing, By product take the Price in Material master ing view, Multiply QTY, and deduct that from the total Production order cost. So By Product deduct the same amount (if the Material price of By product remains the same) no matter total cost in production order is going up or down Co Product, In turn, you need to setup the percentage, of cost sharing, in this case if the Total production order cost is going up, Co product cost also goes up.
Now coming to its valuation - Their price control is usually S and the standard cost for them is maintained manually from MR21... When the by products are received into inventory from production order, the total cost of sugarcane issued to the production order will get reduced accordingly i.e. Cost of Sugar = Cost of Sugarcane - (Qty of bagase/mud/molasses * Std cost) + Other overheads I have scenario regarding Co Product and By Product in my client place. May I know that what is the Co Product and By Product concept in Controlling module and how valuation and standard prices happened. Please let me know what are the configuration required. You need to define follwoing Setting for Co Product:
1. Create Source Structure in SPRO 2. Assign the Source Structure to your Production Order Settlement profile and on the Settlement Profile Check Mark on Equivalence Number and Enable to Profile for Order Item 3. On your main Material Master Costing 1 Tab check mark Co Product Option , click on t Production, give the Number and select the Source Structure and click on Equivalance Number button on the same screen, Enter your main product and Co Product define the Equivalnce Number For Example Main Product and Co Product ratio is 55:45 so you haev to define both numbers 4. In BOM check Co Product and the Qty of your Co Product the Qty will be in Negative. Once You create Production Order system will show two line Items as OIT for both the materials.
By product is the product which will be creaed while making production you have to maintain the setting in BOM with negative quantity (-). Then system automatically will pick this as by prodcut. movement type 531 to post the by-product during confirmation. Settlement of cost will be done to the header of material. Co product is the product You have to activate check box in MRP2 view for co product. Co-Products Products that are usually manufactured together can be produced using one production order.
The main product is the primary reason for the production process. It is displayed in the production order header. The system also creates a separate order item for the main product. A co-product is a product that is produced in conjunction with other products. The system creates a separate order item in the production order for each co-product. As a result, it is possible to display actual costs at co-product level. A by-product is a product that is produced in conjunction with other products. The system does not create a separate order item for each by-product. The material valuation of a by-product is always based on the price specified by price control in the material master. Creating a production order to manufacture co-products has the following advantages: Main product and co-product(s) are settled to different receivers Goods movements can be posted simultaneously for all products manufactured in the order The following prerequisites must be fulfilled if you want to create a production order with co-products or by-products. Prerequisite for the main product: i) The indicator Co-product must be activated in the material master of the main product (MRP area) Prerequisites for a co-product: i) The indicator Co-product must be activated in the material master of the co-product (MRP area) ii) The co-product must be listed as an item in the bill of material of the main product
iii) On the Basic data tab page of the BOM item, the indicator Co-product must be activated in the field group General data. Prerequisites for a by-product: i) The by-product must be listed as an item in the bill of material of the main product ii) The bill of material item must have a negative quantity (for example ‘1 -’). Co-Product Configuration for following scenario: Product A (Parent Material / Input Material), Product B, C and D are child materials (output materials). During manufacturing of Product B, we get 40% of Product D and the remaining 60% will be product B. Product is C is not the co-product, it always gets produced for 100%. Solution: Product B is the one you are trying to manufacture in the production process. And while doing so, the input material is A and Product D is produced. In this process Product C always gets produced. B & D are co-products. C is the by-product according to the definition of these by SAP. And A is the input material. Please create the BOM for B in which A will be having a +ve qty and C & D will have -ve qty. First, you have to create the BOM for B instead of A, since B is the one getting manufactured and not A. A will be either procured or manufactured in a different process. You will define BOM for A only for the process, which manufactures A. We have to check Co-product indicator in Material Master (MRP2 View) for Product B and D.
Product B and D should have co-product checked in their "Basic Data" tab of BOM View (BOM view of Product A, I mean). For C you will have to tick the check box Fixed Price Co-Product in the Material Master Costing 1 view. We have to have Apportionment structure in MRP2 View (t Production Button) for Product B only, and that apportionment structure (assuming we don't use Source Structure) with equivalence number will have 2 products product B with equ. number = 60 and Product D with 40 In case of Co-product costs are settled with a apportionment structure. In case of By-product the price of this by-product is credited to the order or the material stock of the lead material being manufactured. Co-Product as well as byproduct are defined as BOM Components/Items. Both of them have negative quantities. ( Not all negative quantity items fall under these categories!). When BOM is created for FERT , you can see one indicator in COMPONENT DETAILS screen for co-product. You need to define the co-products with this special indicator
1. Select Co-Product indicator in MRP2 view for header material as well as for co-product materials. 2. Define the co-products as BOM components. 3. Give negative quantity in the BOM for co-products Also select co-product indicator by clicking on BOM item details and in the Basic Data Tab. 4. To calculate the production cost of co-products give equivalence numbers in MRP2 view by clicking t Production push button
or you can give the same in the settlement rule in the Production order by clicking Header menu - Settlement rule. 5. You will get the GR qty for co-products while doing MB31, 101 for the order of the header material For By Products 1. Donot set the co-product indicator any where. 2. Define the By-Products as BOM components and give negative qty. In case of Co-product costs are settled with a apportionment structure. In case of By-product the price of this by-product is credited to the order or the material stock of the lead material being manufactured. So you cannot post an automatic goods receipt for co-products. Co-Product as well as by-product are defined as BOM Components/Items. Both of them have negative quantities. When BOM is created for FERT , you can see one indicator in COMPONENT DETAILS screen for co-product. You need to define the co-products with this special indicator . 101 movement will take place for the material of which production order of the material is created and in case of coproduct you are creating production order of only one material and the other material gets created simultaneously for which no need of creating seperate order or production planning.. that is the reason auto GR is not possible for co-product.
Yes you are right if a materail is coproduct, you need to activate the coproduct check box in material master MRP2 view. Also in the BOM you need to define this material in -ve quantity. For coproducts we also need to define the apportionate structure with equivalence number for costing purpose, this will be done in "t Production" details in the
same view. Biproduct has only the -ve quantity in BOM component, it does not go for t production costing. Process Orders with Co-Products: Prerequisites
*Activate the indicator *Co-product in the material master of the co-product (MRP 1 screen).
The co-product must exist as a component in the material list (BOM's equivalent in process order set up) of the main product (negative quantity, item type L).
The indicator Co-product must be activated in the General data screen of the material component.
If you create an order to manufacture more than one product (co-products), the system generates an order item for each co-product. Settlement is then in two stages: 1. The costs for the order are distributed per the settlement rule for the order header to the order items. The equivalences for this distribution can be proposed using an apportionment structure entered in the material master record. 2. If you have set status "Delivered" or "Technically closed" for the order item, the difference between the value from the apportionment and the credit posting at the time of delivery is settled to stock. Co-Products: Costs The costs for the orders are assigned to the order header and then distributed to the individual co-products according to equivalence numbers. Note: You specify an apportionment structure in the material master of the main product. The apportionment structure specifies how the total costs should be distributed over the main product and the co-products.
Based on this data, the system creates the following when a process order is created:
One settlement rule that distributes the total order costs over the main product and the co-products (i.e. over the individual order items) One settlement rule per item that assigns the costs to stock At present, it is only possible to distribute actual costs. Co-Products: Using a Source Structure - Optional By using a source structure, you can enter different equivalence numbers for different cost element groups within the same apportionment structure. Example of equivalence numbers with source structure Cost element grp
Main product
Co-product
Production costs 1
4
Material costs
2
1
Overhead
5
3
Here, the cost distribution varies between the cost element groups in the apportionment structure. If you do not use a source structure, the cost distribution must be the same for all cost element groups in the apportionment structure: Example of equivalence numbers without source structure Cost element grp
Main product
Production costs 2
Co-product 1
Material costs
2
1
Overhead
2
1
CONFIGURATION REQUIREMENT- OPTIONAL If you want to work with a source structure, you need to: 1. Define a source structure in Customizing. After this, define an apportionment structure in the material master of the main product. 1. Go to the MRP 1 Tab of material master of the main product. 2. Select the function key 'Co-prod. manufacture'.The system then displays a dialog box in which you can enter apportionment structures. Labels parameters
Posts: 409 ed: 5/31/06 Forum Points: 1,442
Re: Co-Products Posted: Jul 31, 2006 11:08 AM in response to: Shridhar Deshpa... Hi,
Repl y
In the PP By and CO product is the same, You need the negative Qty in BOM. Material Master, you need to tick the t Poduction in the CO Product, not for By Product. The Main diff is in Product costing, By product take the Price in Material master ing view, Multiply QTY, and deduct that from the total Production order cost. So By Product deduct the same
amount (if the Material price of By product remains the same) no matter total cost in production order is going up or down Co Product, In turn, you need to setup the percentage, of cost sharing, in this case if the Total production order cost is going up, Co product cost also goes up. Hope this helps. Thanks, Viswanath
Posts: 549 ed: 3/23/06 Forum Points: 404
Re: Co-Products Posted: Aug 1, 2006 7:43 AM in response to: Kasi Viswanath Hai Viswanath,
Repl y
Thanks. Let me consider as By-product. Shall i create this Mollases as Finished product or semi finished product? My actual finished product is sugar. If i suppose consider Mollases also as finished product, Is it possible to assign this mollases(consider as finished product) into my actual finished product "Sugar" BOM? Whether should i consider this mollases as semi finished or finisheed? If i consider this mollases as semi finished, is it possible to create Sales order this mollases? My strategy is: Make to stock production.
Please guide me on this. Thanks Senthil
Posts: 10 ed: 12/4/07 Forum Points: 0
Re: Co-Products Posted: Jul 25, 2008 4:57 PM in response to: Shridhar Deshpa...
Repl y
Hi For your query I`m giving my opinion. Mollesses can be created as semifinished product, if your client produces or uses this mollassess for manufacturing any other product other you can create a mollasses as finished product. In either case you can create sales order. But if you create Mollasses as finished product, then you cannot use as mollasses as child material to include in the BOM Hope this explanation will help to solve your query. Regards, Surya
Posts: 4,829 ed: 5/8/07 Forum Points: 13,402
Re: Co-Products Posted: Jul 25, 2008 11:46 PM in response to: Shridhar Deshpa...
Repl y
Hi, Do not worry whether you can sell FG /
SFG, create FG as BOM items, these things depend only on your setting. - If you want to sell goods, you need sales view allowed for material type (SPRO > Logistics - General > Material Master > Basic Settings > Material Types > Define Attributes of Material Types) - If you want a material type allowed as item in BOM: SPRO > Production > Basic Data > BOM > Item Data > Define Allowed Material Types for BOM items. An impoertant difference between coproduct and by-product is that by-product can be confirmed automatically (and you assign it to operation) but co-product can be confirmed only via MB31+PrdOrd reference, not assigned to operation. Some settings are also different (coproducts indicator, proportion rate). BR Csaba
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Pavanakumar Posts: 444 ed: 3/15/07
Forum Points: 302
Top of Form By product / Co product : Reg
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Posted: May 8, 2009 11:41 AM
Hi, I am working with t production and have some issues related to same. 1 - I have created a production order with one co product and one by product. But when I do the goods receipt, in MB31, by product is not appearing during goods movement. 2 - During WIP calculation I am always getting values as zero. Even though system is not showing any errors. 3 - System is not identifying any Settlement Rules automatically when I create production order. 4 - Even when I maintain settlement rule with equivalence no.s, system shows settlement only for the main product but co product and by product is not appearing at all, Can you guide me to resolve these issues. Pavan
Re: By product / Co product : Reg Posts: 4,168 ed: 8/31/08
Forum Points: 5,908
Posted: May 8, 2009 11:44 AM to: Pavanakumar
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in response
Hi, in case of By-Product, while confirmation system posts by-product by 531 movement type in case of co-product, while taking GR for header order system does GR for ur co-product Regards kumar
Re: By product / Co product : Reg Posts: 4,852 ed: 9/1/06
Forum Points: 11,488
Posted: May 8, 2009 11:55 AM to: Pavanakumar
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in response
Pavan, Bi-Product GR would happen during confirmation/backflush or during MB1A goods Issue. Bi-Product cannot be a reciever for Settlement. Please go through my thread Bi-Products and Co Products Regards, Prasobh Re: By product / Co product : Reg
Posts: 429 ed: 6/26/08
Forum Points: 1,366
Posted: May 8, 2009 12:52 PM response to: Pavanakumar
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in
Hi 1) Co - Products will be posted in to stock with 101 and byproducts with 531 hence you can't post a by product in MB31 3) Assign the settlement Profile in OPJH per order type then u will get the settlement rule copied to Order 4) For the main product and co-product tick co-product check box and for Main product in MRP-II view in t Production tab assign source structure In the source structure maintain both material no of main & coproduct , valid to and eq no Regards Brahmaji Re: By product / Co product : Reg
Posts: 444 ed: 3/15/07
Forum Points: 302
Posted: May 8, 2009 12:57 PM to: Prasobh Karunak...
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in response
Hi, Thanks for your reply. What about order settlement, any idea why system is not creating settlement rules. ( for both main product and co product) and Why during WIP calculation all the values are zero??? Pavan Re: By product / Co product : Reg
Posts: 444 ed: 3/15/07
Forum Points: 302
Posted: May 8, 2009 1:10 PM to: Brahmaji Devara...
hi,
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