Trading goods as raw materials

Hi friends,
assuming that, in my business we have regular trading goods which are sold. But in some cases we use them for production ( which are actually meant for sales ).
Now, we would have already identified them with material type HAWA.
what are the steps or pre requisites to use them for prodution in SAP. Do i also need to identify that material as ROH. What are the FI effects of this. Because ROH and HAWA have different valuation class.
Thanks in advance
Pavan

Der Material type change associated with the valuatioon class change which is linked with GL a/c
Now just goto MMAM and try to chage...system will give required pre requisit.
From FI angle - valuation of the stock will not get shifted GL a/c to other...hence there should not be nay issue.
Since there was no consumption of gthe material till now in the system, you may hev to fix a consumption account in OBYC for this valuation calss and valuation modifier.
check from MM angle about you may required to maintain some view in material master if required.
Message was edited by:
Rajesha Vittal

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Dear Experts,
We have a business scenario where in we purchase a case of 8 units quantity and we break the packing and repack into each case of 3 quantity, we are using different materials codes for both the materials under the same material type HAWA.
The issue is both the materials belong to the same material type and business is not ready to use the procuring 8 quantity case as raw material. The packing charges and labour charges has to be charged to the product not to any cost object.
Is there anyway to address this scenario in SAP without creating the BOM
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Hi Stephen,
I am explaining the complete scenario.
Creation of purchase order for 8 unit case(8 unit case config) with material X(HAWA material type)
GRN preparation
Break the 8 piece pack and repack to 3 piece pack this( 3 piece case config)(HAWA Material type only)
Requirement is this 3pc pack charges(labour and packing charges) to be charged to the product only without charging to any cost object.
At present we are doing it manually by preparing the physical inventory document (Mi01) and by posting the manual financial entry which is not acceptable.
We are using product costing for normal production with make to order for exports and repetitive manufacturing for with in country sales.
This trading goods issue to be addressed without charging the cost to any cost center or cost object.
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How to including the finished goods as raw material to the other FG?

Hi Gurus,
Have a nice day!
We would like to create production order for our semi finished goods and then we will doing confirmation. After we have produced our semi finished goods, we would like to include it in the bom as raw materials for our final FG. But how to handle this situation? Any suggestion on how the procedure to do it that the cost will not be double..when confirming the semi FG production it will generate cost for the usages of it raw materials. The semi FG is valuated then when i included it as raw material into Final FG it will generate cost for consumption in doing confirmation. I dont know the correct term for this scenario. In other word or semi FG will be part as a raw material to the next production.
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Hello Gurus,
Thanks julian for contributing your idea. I really appreciated it.
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Hi Devidas,
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1. Reverse the rejected materials agaisnt the production order(movement 262).
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We have a few raw materials which are purchased from different vendors and of different brands. We have opened split valuations for these raw materials. These raw materials are later used in manufacture of different finished goods. We use MAP for raw materials and Std. for finished goods. What configuration and processing steps will be required to run standards cost estimate and what will be standard price for a finished good considering the following example:
Material X is finished good
Raw Material A with split valuation @ USD 5 (brand aplha) & USD 10 (brand beta)
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Please reply
Edited by: Chris SAP on Sep 29, 2011 7:56 AM

hi chris
Hope you have configured the material A for split valuation. while calculating standard cost estimate for the material C. through ck11n, the system will pick up the header price from material master.
But here you are saying that you have chances of using the material A, 60% of brand alpha and 40% brand beta
Instead of using split valuation use mixed costing concept. create the material A with separate Ids and create two boms one with alpha and the other with beta.
create procurement alternative in CK91N and mixed ratio with Ck94 and release the mixed cost estimate
please go through this thread also
Re: Difference between Split Valuation and Mixed Costing
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Hello Experts,
The scenario is as below:
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Chetan.

Hi Chetan,
Your scenario has some major issue.
1. You cannot produce RAW material in SAP.
2. The cost of material produced inhouse will be different than that of original RAW material.
3. There will be some cost effect in the final finished product if you consider this inhouse produced material for product costing of finished goods.
We have similar scenario with my client and here is what I have implemented.
1. Create a new HALB type part number for the inhouse manufactured RAW material. This will ensure that you assign Routing and BOM to same and can capture the COST for the same.
2. Creating new material will enure that the product costing for inhouse produced RAW material is done.
3. You can create single Production order for the same as you only have to capture cost. This depends on your Business scenario.
4. Once you have inhouse produced raw material, you can create alternate BOM for the FINISHED Material with this new Part number in BOM.
5. Create Production Version for the two BOM and ask Planner to select the Version 2 if he requires new part number in Production Order. I assume that this case would genrally appear in very small numbers.
6. Now coming to product costing for final assembly. Since we are going to reuse scrap material to create the new part number, only activity cost and component cost will be used to determine cost. This cost will be less than that of RAW material cost.
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While creating new material we have to give the the material type and as per this the screen will display.I want to know what is the difference between Finished Product and Trading goods in material type.Can anyone give some example of materials/ products which will come under these two material types?
regards
jyoti

Hi Jyothi,
Difference between Trading goods and Finished products.
Trading goods:- Trading goods means company will not manufacture those goods they will purchase the goode from the vedor then they will supply to the cistomer.(thses also can be finished products but not manufactured by the company).
Here production will not takes place so no need to maintain production planning data in the material master.
Supply will happen in two ways,
1.First Company will take the delivery from vendor after that company will deliver the goods to the customer(Individual purcahse order).
2.Company will instuct the vendor to supply the goods directly to the customer.(Third party process).
Finished products :- Which are the products produced or manfacured in the company premises itself.
Here production will takes place so need to maintain production planning data in the material master.
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I hope it will clear for you,
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Hi all.
We just started a project to install SAP system.
Our client need to valuate their raw materials by vendors(makers).
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Raw01(from VendorA, B, and C) are same materials but the price is largely different by vendors(makers),
just as raw01(VendorA)'s price is 1,000/EA,
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So our clients , expecially finance dept and purchasing dept, want to manage them seperately.
Finally we consider about split valuation(batch valuation with valuation type).
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Mahnkwi.

hi chris
Hope you have configured the material A for split valuation. while calculating standard cost estimate for the material C. through ck11n, the system will pick up the header price from material master.
But here you are saying that you have chances of using the material A, 60% of brand alpha and 40% brand beta
Instead of using split valuation use mixed costing concept. create the material A with separate Ids and create two boms one with alpha and the other with beta.
create procurement alternative in CK91N and mixed ratio with Ck94 and release the mixed cost estimate
please go through this thread also
Re: Difference between Split Valuation and Mixed Costing
Krishna

COGS for Trading Goods

Hi All,
My client is following Non valuated Sale order Costing where COPA is activated.
In the above scenario, cost and Revenue will flow to COPA when Sale order item is settled to COPA.
How about the cost of Trading materials. material are purchased and sold to the customers without any processing.
During PGI, the entry would be COGS a/c Dr
Inventory -trading material a/c Cr
Now i have created COGS as cost element of category 1. During PGI, system is asking for a cost object assignment. But If i assign Cost center in OKB9, i think cost will be posted twice in CO ,ie in Cost center and COPA. Is it correct.
Pls clarify me on this, as I wanted cost to be shown against the revenue in COPA for Trading materials.
2. Discount to customers, is created under CE 12 category. Will this have any impact on FI when discount is given for any sale which is done from FI.
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Hi,
Thanks everyone for your replies.
1. Trading material are procured , i e for catering to the customer order and also procured to stock and then sale wen customer order comes in.
Hence, I am not following MTO scenario for trading goods. Can you pls let me know how to handle both so that ultimately my cost should flow to COPA with Revenue.
As told, COGS is brought through either Stand cost estimate or VPRS. In our case its through setttlement of Sale order.
For trading materials, it should be through VPRS.
Thanks,
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CENVAT UTILIZATION ON RAW MATERIALS.

HI ,
AM INTO SALES & DISTRIBUTION.
CAN U PL EXPLAIN WTS CENVAT CREDIT & HOW ITS UTILIZED , ON RAW MATERIALS & FINAL PRODUCTS.

Hi Jerry,
Background
When we Purchase goods we pay duty (Excise) this we can take credit if we are making some Finished goods out of the raw material by doing some value addition. When we do Sales of the Finished goods which was made by converting our raw material we have to Pay Excise (because goods are Physically moved outside our Plant).
According the Concept of CENVAT since we have already paid Excise for the raw materials which we have used for making our Finished goods we can claim the excise we have paid & only the difference amount we will pay to the government.
So normally when we do Procurement we will capture the Excise duties in Seperate GL's & when we do Sales we will capture the Excise payable on sales in Seperate GL's & at the end of every month or before 7th of the next month we will do utilization ( i.e we will utilize the excise payed on inputs(purchase) against the excise to be payed on Sales).
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Procurement Side
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The duties (BED,Ecess & SHEcess) will post in different A/C's say X,Y & Z
The sum of X,Y & Z will be posted in a clearing A/C & we will pay the same to Vendor when we do Bill Passing.
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When we Sell goods we will create an Excise Invoice as goods are movin out of our Premises.
T.Code - J1IIN
We will post the Excise Payable on Sales to different GL's
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T.Code - J2IUN
If our input GL balance (Purchase Excise Credit) is less than our Sale side Excise Payable - We will pay the balance amount from PLA
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Go through the CIN threads in the Forum for more clarifications.
Award points if you find this as useful.
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Getting Blend materials from Raw Materials in RMWB transaction technically.

Hi,
I am working on a PDM report having requirement for determining all unit and case UPC that contain a chemical represented by a CAS.
I have a requirement for getting Blends using Raw materials.I am able to find the raw materials from pure substance but not able to get a logic for getting the Blends from this raw materials.
Is there any Function Module to find the Blends from raw materials or any logic which I can put in my program to find this.If anybody could help me in this.
Then I have to get the Finished Goods using the Blends.
And Finally Finished Goods comprised of Finished Goods.
There is no time to debug the Standard RMWB transaction.
<removed_by_moderator> .Kindly all PDM-ABAP users please help me on this issue.
Thanking you in advance.
Sudip
Edited by: Juan Reyes on Aug 14, 2009 2:49 PM

Hi Chetan,
Your scenario has some major issue.
1. You cannot produce RAW material in SAP.
2. The cost of material produced inhouse will be different than that of original RAW material.
3. There will be some cost effect in the final finished product if you consider this inhouse produced material for product costing of finished goods.
We have similar scenario with my client and here is what I have implemented.
1. Create a new HALB type part number for the inhouse manufactured RAW material. This will ensure that you assign Routing and BOM to same and can capture the COST for the same.
2. Creating new material will enure that the product costing for inhouse produced RAW material is done.
3. You can create single Production order for the same as you only have to capture cost. This depends on your Business scenario.
4. Once you have inhouse produced raw material, you can create alternate BOM for the FINISHED Material with this new Part number in BOM.
5. Create Production Version for the two BOM and ask Planner to select the Version 2 if he requires new part number in Production Order. I assume that this case would genrally appear in very small numbers.
6. Now coming to product costing for final assembly. Since we are going to reuse scrap material to create the new part number, only activity cost and component cost will be used to determine cost. This cost will be less than that of RAW material cost.
So we always suggest our customer to consider OLD part number to determine the PRODUCT COST of final material. BUT business will have to take a call on this.
Do let me know if u need any thing else.

How to manage customer provided raw materials?

Hi,
How to manage customer provided raw materials? Same raw materials are bought from external vendor and sometimes provided by customers. How to receive customer provided parts into inventory so that Inventory value wont get affected? My client doesn't want to maintain 2 materials numbers for the same part.
Thanks
Nag

Hi,
Maintaining two different materials is not required. These are the steps to be followed.
1) You can create the Customer as a vendor in XK01.
2) Extend the material with "Purchasing view" in MM01.
3) create Purchase order in ME21N.
4) Do Goods Receipt in MIGO.
5) Do Invoice in MIRO.
Please note that if the Price control of this material is V(Moving Average) then there will be valuation change with every purchase. With price control S(standard price) the valuation will be constant.
Raw materials in common is maintained with V normally.
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Trading goods as raw materials

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