RE: BOM and Reuse Material

This is a follow-up reply to Christy Poole (sorry for the delayed response)
on the topic of capturing ?re-grind? and adding it back into stock. 

I agree with Fred?s recommendation regarding a co-product and would like to
add a few additional thoughts. Some users have created a separate part
number to represent the trimmed re-grind material. Obviously, this depends
on the specific situation. However in most cases the trimmed-off material is
no longer in the same ?form-fit-function? as the virgin raw material. A
separate part number also makes the material easier for the users to
identify & track.  

You could also code the re-grind as a By-Product. As you probably know, this
is done in the BOM. The decision between coding something as a by-product
vs. a co-product could be determined by how your company would like to track
cost for this component. 

If the re-grind item is set up as a co-product, BPCS forces you to assign a
percentage of the process cost to that component. This is also done in the
BOM. Based on that percentage, BPCS will then assign a cost to that item
during the cost rollup. Consequently, as you issue this item back into other
processes, the cost is tracked.

In the by-product scenario, the cost of the regrind is covered by a scrap or
yield factor. The full cost of this re-grind (although it is used elsewhere)
is absorbed into the finished product for that process.  

Christy, I hope this helps. Have a great weekend!

Bud North (for Mike Sarro)
PHOENIX Business Consulting, Inc.
Tel: 978-263-8326, Fax: 508-664-8045, Cell: 508-572-9701
Email: bnorth@xxxxxxxxxxxxxxxx
www.phoenixbcinc.com 
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