Dynamics F/SCM Customer Experience (CRM) Dynamics GP Dynamics Business Central (NAV) Dynamics SL Power Platform Fabric Copilot

[Zac Hess]

If you have a Raw Material/Component Item setup with 10% scrap.  Will NAV add 10% to that Item’s Unit Cost, which will then Roll-up into the Cost of the Finished good?

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Zac Hess
Director of IT
Saris Cycling Group
Madison WI
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[Ron Ketterling]

Scrap % is a planning tool so that the planning worksheet calculates the right amount of material needed and so pick tickets have the needed amount.  Cost is affected by the amount of raw material posted as consumption. If you post only the quantity used in the product, sceap will not be in the cost. Whatever amount of material you enter as consumed is the material cost and deducted from inventory.

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Ron Ketterling
President
Business Automation Specialists of MN, Inc.
Minneapolis MN
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[Kevin Fons]

Ron is correct, so if you are backflushing it will backflush the 10% additional and included it in the cost of the production order and thus the FIFO cost when you update the unit cost from the order.

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Kevin Fons
Senior Application Consultant
Innovia Consulting
Windsor WI
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[Zac Hess]

Thanks.  So would we enter the Scrap % on the Routing, and that would flow down to the Production Order, or where would we enter the Scrap %?  I also see there is a Scrap % on the BOM.

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Zac Hess
Director of IT
Saris Cycling Group
Madison WI
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[Ben Baxter]

You will need to answer your own question based on your process and materials.  See below.

You enter the Scrap % on the Routing when the machine, or process, is the cause of the Scrap.  This means all products which are used during that Operation (Routing Link Code) are going to incur scrap consumption and cost (assuming auto-flushing).

You enter the Scrap % on the BOM, when a specific material has a natural scrap factor.  Regardless of what the material is run on it will always have some scrap associated, so the setting is made on the BOM, not the Routing.

I hope this helps clear it up.

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Ben Baxter
Consultant
Accent Software, Inc.
Carmel IN
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[Peter Lomman]

Just some further clarification on Ben’s response;
Scrap % on the BOM is for left over material that may not be used. an example would be cutting a shape from a sheet of metal.
Scrap % on the Routing is a result of the process applied to the material. an example may be a liquid that is heated and some evaporates, or the oil left in a container that sticks to the sides.
As there may be multiple routing operations where scrap% can be applied, the result for the production order is an increasing amount of scrap for each operation.
Routing Operation scrap% may also be called yield, as it indicates the amount of good material that comes from the process (routing operation) and is therefore available for the next operation.
Here is an example to illustrate the cascading impact of multiple operations with scrap% on a production order for 100 units.

Routing Operation 1; scrap% is 5% so only 95 of the input 100 is likely to pass through this operation. This means there is only 95 available for the second operation.
Routing Operation 2; scrap% is 10% so only (95 less 9.5) of the input 95 is likely to pass through this operation. This means there is now only (95 – 9.5) available for the second operation.
This gets worse if scrap is applied to all operations (the cascading effect).
So in order to get 100 units from this process, the standard system factors up the quantity required to compensate for the expected scrap%.

if the process yield is better than the expected routing operation scrap% then there may be additional output at the end of the processes.

Regards
Peter

——Original Message——

You will need to answer your own question based on your process and materials.  See below.

You enter the Scrap % on the Routing when the machine, or process, is the cause of the Scrap.  This means all products which are used during that Operation (Routing Link Code) are going to incur scrap consumption and cost (assuming auto-flushing).

You enter the Scrap % on the BOM, when a specific material has a natural scrap factor.  Regardless of what the material is run on it will always have some scrap associated, so the setting is made on the BOM, not the Routing.

I hope this helps clear it up.

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Ben Baxter
Consultant
Accent Software, Inc.
Carmel IN
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