Scrap Reporting

Hello, we are trying to accomplish the following in our system:

• Track material and product scrap/cycle count adjustment by part number, lot, scrap code/reason, cycle count reason.
• Track defects (production scrap) in sortable fields and down to material or defect code. Entering scrap (and reporting) allows to report by component, sub-assembly or finished product level.
• Track scrap per stock item

There are a few methods that we know of, but each has it’s drawbacks from our perspective, summarized below. Does anyone have suggestions for the best approach to overcome the issues noted? There may be some gaps in the procedures outlined as we are new to the system.

Method 1: Scrapping Against the Production Order

These are the general steps as we understand them, please confirm or correct as needed:

1. Scrap action in the BOM must be set to “Write-Off” or “Quarantine”
2. In the Move transaction within the production order (such as op 010 to 020 in our case), you can enter quantity scrapped, reason, and quantity to proceed.
   1. This is tracked as a WIP adjustment
3. Production preferences can be set to include scrap in completions, so the production order can be closed as long as scrap + made = planned.

These are the potential issues we see with this method, please let us know if these are not true or there is a work around:

• Standard cost of the part increases due to the increased scrap. Is this true even if the “Write Off” and “Quarantine” is tied to a different GL account?
• It may be hard to understand which portion of a stock item lot was accepted and which portion was scrapped.

Method 2: Using Materials and Issues Transactions

These are the general steps as we understand them, though we are rusty on this method, please confirm or correct as needed:

1. A negative materials transaction is made to pull a component off of the production order.
   1. This automatically creates an issues transaction, however there is no way to edit this to specify a reason code.
2. An issues transaction is made to assign the scrap code. This seems like a duplicated effort to 1a.
   1. This only indicates one location and is reflected accordingly, but it is otherwise unclear where it is going to or coming from.

In line above are the potential issues we see with this method, please let us know if these are not true or there is a work around.

Method 3: Create a Scrap Warehouse/Location

These are the general steps as we understand them, please confirm or correct as needed:

1. Move items to this location, either as part of the negative materials transaction above or with a transfer.

These are the potential issues we see with this method, please let us know if these are not true or there is a work around:

• These parts sit in the scrap warehouse forever, despite being in a landfill somewhere untracked.
• This shows a sum of all the materials there, it does not show how much was scrapped and why. For example if 5 parts were scrapped on day 1 for reason X and 5 parts were scrapped on day 2 for reason Y, it just shows 10 parts in the scrap location.

Thank you in advance for any insight you can provide!