Re: Adding standard fixed costs to Item Process

[Dave Turbide <dave@xxxxxxxxxxxxxxx>]

   There are actually three ways to show losses (scrap) in MAPICS, and each
   has a specific purpose.

   Yield - reflects losses (scrapping partially completed end items) during
   the process. The MO will still say 10 pieces, but components used earlier
   in the process (before yield losses) will be allocated and issued in
   higher quantities because they will (supposedly) be thrown out as
   partially completed end items during the process. MRP will still expect 10
   completed items, but lower than expected losses will actually recalculate
   the expected quantity out of the MO at completion, as higher than expected
   losses will reflect in MRP expecting less out. Scrap is reported at the
   operation level (PCC operation report). Components must be identified as
   to where they are used (operation where used) in order to be properly
   planned and costed. Yield is specified at the operation level.

   Component scrap - if you expect to lose components in the course of
   putting the product together, include the component scrap factor in the
   bill of material quantity-per. Additional components will be planned and
   allocated. You don't have to issue them unless they are needed (giving you
   a favorable material variance). Some people list component scrap as
   additional product structure records (with unique sequence number, you can
   list the same component more than once on a bill) but that is rare.
   Engineers generally don't like scrap factors built into quantity-per as it
   clutters up the bill. It's a far more accurate reflection of reality for
   costing and planning, however.

   Finally, there's shrinkage (Item level) which is intended to reflect
   losses that take place outside of the manufacturing process (samples,
   spoilage while in stock, etc.) - shrinkage will increase planned
   acquisition quantities in MRP but will not increase the cost in cost
   roll-up

   Hope this helps.

   Dave Turbide
   dave@daveturbide.com
   www.daveturbide.com

   message: 1
   date: Wed, 5 Feb 2003 11:16:11 -0600
   from: "McCready, Joan" <Joan.McCready@metaltekint.com>
   subject: Adding standard fixed costs to Item Process
   To all -
   We are wanting to account for "anticipated" scrap costs when we create an
   Item Process (EPDM Routing), so that historic scrap costs can be included
   in
   our standard cost and passed on to customers in our pricing. However, we
   do
   not want to set a "yield" on our routing operations, because if we do the
   job right, there will not be any scrap! Setting a yield means that to
   service a 10-piece order, MRP will expect an MO for 11 or 12 pieces, when
   we
   only want to make 10 pieces. BTW, we manufacture to customer order - we
   have
   almost no stock inventory...
   How are you folks getting this scrap factor rolled into your costs without
   messing up the actual routing?
   Thanks - Joan
   Joan McCready, IS Manager phone: 636-479-4499
   MetalTek International fax: 636-479-3399
   The Carondelet Division www.metaltekint.com
   <www.metaltekint.com>
   8600 Commercial Blvd
   Pevely, MO 63070

   Dave Turbide, CFPIM, CMfgE, CIRM
   Market Analysis and Communication
   883 Ocean Blvd
   Hampton, NH 03842
   phone(603) 926-1435
   fax (603) 926-0862
   www.daveturbide.com
   .