How to advice for sale of scrap generated in the store.

Question

Dear All,
Our client is automobile parts manufacturer.Here the scrap are of three types.
1)Scrap generated through production
2)Packing material comes with raw material
And third one is the scrap generated while manufacturing the trollis to carry the goods in the plants.
How can we capture this.Please guide.
Regards,
deepti

Answer 1

Dear deepti
1)  We call it as Line rejection.  Since you said that it is an Automobile industry, to my knowledge, two types of base material will be used.  Cast Iron and Aluminium.  This is only an example.  The base material may not be the same what I have indicated. To apply this logic, I have taken these base materials.
First you create a storage location for scrap and then create material in MM01 as Casting Scrap and Aluminium scrap with UoM in Kgs. Whenever rejection happens in production, through MB1B / 311 movement, your production people will have to assign the above storage location so that you will have scrap stock in system.  What you have to do from SD point of view is that, you create a sale order for the scrap, create delivery and bill.  The unit rate for scrap should be decided by the manufacturer.
2) Packing material is a generic term; it may be wooden pallets, cartons etc..  So if it is pallets, you have to create material as Wooden scrap and similarly carton scrap.  Do MB1B as explained above.
The above logic applies to all.  Last but not least, if you follow standard movement types like 551, 555 etc., you cannot track the stock of material.  So if you want to capture scrap sales, consider 311 movement type.  The best judge would be your MM guy.  Check with them also.
thanks
G. Lakshmipathi