Material cost charge to Production Order from Cost Center / Work Center.

Question

In Production Order Environment, is it possible that goods are issued from Storage location to Cost Center / Work Center, and in turn charged to Production Orders.
Scenario. Transformer Manufacturing.
Production Order size : 100 Units
Steel (Kgs) per Transformer : 3 Kgs
Total Steel required for Production Order: 300 Kgs (100x3)
In the process of manufacturing of a Transformer Steel or Core winding is the first process step.
Even though the Steel required for above said Production Order is 300 Kgs, the minimum issuable lot size from stores is 2000 Kgs.
Is it possible in SAP ECC 6.0 that the Steel of 2000 Kgs is issued to a Cost Center / Work Center, and later charged to production order based on actual Consumption in the said Cost Center / Work Center.
Regards, Replies and Sugestions shall be appreciated
Madhu

Answer 1

Thank you for the reply,
However, the scenario that i had in mind was a bit different from what you had conceptualized.
Scenario - These transformers are basically for loading on to Inverters & UPS, The max weight of the transformer range from 15-30 Kgs. and they dont have an external casing of steel as seen on Indian Electricity Board transformers. Multiple production orders are processed at a single time in the Plant as per Customer specifications.
The general process followed for manufacture is as follows:
1. Core Winding u2013 This process takes place in the core winding department. Steel reels are loaded on to Winders and individual cores of approx 5 u2013 30 Cm Diameter are produced. (Multiple reels of Steel are stacked one on top of the other onto a pallet.) Usually issue of steel from stores happens pallet wise. The pallets of steel generally weigh in excess of 2 tons.
In the present situation (Non SAP Environment) the entire pallet of Steel is issued to the Core winding department and later the Output is charged to multiple Production Orders, based on the records of the Core winding dept. Since in general the steel content in the FG ranges from 3- 25 Kgs multiple Production Orders can be catered to from one Pallet of Steel.
2. Core Laithing. The wound cores are laithed so as to make the sides smooth.
3. Core Annealing u2013 Heat treatment process.
4. Core Insulation. u2013 Insulation of the annealed cores with insulating material.
5. Primary Winding. u2013 Copper is wound as per the BOM Specification. The issue like that of Steel also arises in the Copper winding process. Here also the Cooper comes in Spools which far exceed the requirement for any Production Order. The minimum issueable lot for Copper from Stores is one Spool. The current practice followed is that the Cooper is taken in the name of the Copper winding department and later charged to individual Production Orders.
6. Primary Soldering.
7. Mid Insulation.
8. Secondary Winding
9. Secondary Soldering
10. Shielding
11. Final Insulation u2013 Same issue with insulation too, since the insulating material comes in rolls.
12. Testing.
13. Potting & Drilling - Process of pouring a chemical compound in the center of the transformer, which helps the transformer to later be loaded on an Inverter. The same issue with like of Steel, Copper & Insulation arises here too, since the chemical compound comes in big containers capable of meeting production requirement for a week.
14. Packing
15. Transfer to FG Inventory.
One of the suggestions was to issue the entire 2000 Kgs to the Production Order and then return 1700 kgs after completion of the Production Order based on actual usage. However, in my opinion this option might not be practicable because, assuming that I get another / multiple Production orders in between the issue of 2000 Kgs and return of 1700 Kgs, issue to the new Production order will not be possible if the stock in stores was only 2000 Kgs initially. In case assuming that the material is available in stores for the next production order, the situation could worsen in case of receipt of multiple production orders.
Hope, I have explained the scenario & issue being faced.
Regards
Madhu