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Scraping output

  • 1.  Scraping output

    SILVER CONTRIBUTOR
    Posted Dec 18, 2018 07:34 PM
    Hello all,

    ​​Occasionally we have to "scrap" output on a production order. Let's say the order is for 5 units. We make 5, but only 4 pass inspection. We have been recording all 5 as completed, and then making an item adjustment to remove the bad unit from the item card.

    I am trying to use the "scrap quantity" instead but am not getting the result I want. In the output journal I entered output quantity of 4 and scrap quantity of 1 for all routing steps on the production order. (we use work centers not machine centers).  When I look at the production order, the components for all 5 units have been consumed. The routings are only completed for 4 units. The production order shows 4 finished and 1 remaining.  There is nothing on the production order that tells me I scrapped 1 unit.

    So, as I see it, I still have to complete the scrapped unit, and item journal it out? That doesn't get me anywhere.

    Or I could complete the order with only 4 completed. Don't like that either.

    I must be missing something, any ideas?

    Pat Rounds

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    Patricia Rounds
    Saf-T-Cab, Inc.
    Fresno CA
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  • 2.  RE: Scraping output

    TOP CONTRIBUTOR
    Posted Dec 19, 2018 08:20 AM
    ​One method that works for us is to change the production order quantity from 5 to 1. Post consumption of the material through the consumption journal for the 4 pieces scrap. Then output the 1 good part through the output journal. This method is effective IF you want all the costs rolled up into that 1 piece output. If you do not want all the cost rolled up, then we would still change the production order from 5 to 1. Output the production order. Then negative adjust the material that was scrapped.

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    Robert Buccigrossi
    PT Tech, LLC
    Wadsworth OH
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  • 3.  RE: Scraping output

    TOP CONTRIBUTOR
    Posted Dec 19, 2018 08:54 AM
    Complete 5 and scrape 1.

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    Ron Ketterling
    President
    Business Automation Specialists of MN, Inc.
    Minneapolis MN
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  • 4.  RE: Scraping output

    Posted Dec 19, 2018 08:57 AM
    Patricia-

    Have you changed the status of the production order to finished?  NAV goes through a round of correcting some estimated entries in order to present actual costs.  This is important because it will provide the actual cost to get 4 good pieces equals 5 units worth of consumption AND time on the work/machine centers.  I haven't researched what it does to the routing, but I know that the material costs "catch up" during this routine.  Another example is if you launch a large production order, say 100 pieces, and only finish a few pieces, say 5, then before the production order is marked finished it looks like those 5 items, that have moved to finished goods, cost a great deal to produce.  This is true if you were to finish the production order right there.  As you complete more items (the last 95 pieces), NAV will distribute the costs across all of the completed pieces.  The "finish" routine manages all of this.  Hope this helps.

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    Jason Nicolaou
    Engagement Manager
    Sikich LLP
    Naperville IL
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  • 5.  RE: Scraping output

    TOP CONTRIBUTOR
    Posted Dec 27, 2018 01:00 AM
    Edited by David Wiser Dec 27, 2018 01:01 AM
    A couple of points.  First, the scrap quantity posted on the production order is informational only.  It posts through to the capacity ledger but does not impact any of the entries.  You can then use it for reporting.  Like if you want to track scrap through various processes.

    Second, how you output quantities really depends on how your want to report costs.  Some companies want to roll up all the costs into the good production.  In this case, even though you consumed raw materials for 5 units, you only output 4 good units.  The costs for all five will be spread over the 4 good output units (assuming non-standard costing).  You can still report 1 unit of scrap for informational reporting.

    Other companies want to show the cost of the scrapped item.  In this case, you would output 5 units thereby spreading the consumption costs over the five.  Then you would have to do an inventory adjustment to write-off the bad unit (which then carries with it it's share of the cost).  Use a reason code during  the write-off to indicate the reason (i.e. scrap, quality error, etc.).  And, since scrap reporting is informational, you can still record 1 unit of scrap on the production order to indicate that there was scrap from the production process.

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    David Wiser
    Project Manager/Solution Architect
    Beck Consulting
    Kent WA
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