Assembly Scrap | SAP S/4HANA Public Cloud ERP

[Antonio_Morgado]

Hello everyone,

I’m currently working in SAP S/4HANA Public Cloud ERP, and I have a question regarding how Assembly Scrap affects both production quantity and cost estimation.

When I enter an assembly scrap percentage in the Material Master (MRP 1 view), I expect the system to calculate the correct production quantity and adjust the cost estimate accordingly.

Example

Customer order: 1,000 good pieces (yield)
Standard price: 2 USD per piece (without assembly scrap)
Assembly Scrap = 50%

Expected system behavior:

System should plan 2,000 pieces to produce 1,000 good ones
The actual cost per piece should increase to 4 USD (including scrap)

However, in SAP S/4HANA Public Cloud, the system only plans for 1,500 pieces, and the actual cost becomes 3 USD per piece, meaning it only considers 33% scrap, not 50%.

Questions

Why does the system behave like this?
Is there a way to make the system fully reflect 50% assembly scrap in both production planning (MRP) and product costing (CK11N)?
Do I need to adjust configuration or costing lot-size parameters for this to work as expected?

Any insights or examples from your experience would be greatly appreciated!
Best regards,
Antonio

[Chris1973]

Good day @Antonio_Morgado 

Thank you for your question.

Have a look at these references, they provide more detailed guidance:

Assembly Scrap, Costing Scrap, Product Design Cost Estimate, Setting Up the Product Design Cost Estimate

Make to Stock (Discrete Industries) for Cloud Deployment

To summarise, based on your description, could it be that you have multiple scrap factors that are simultaneously active? If yes, the system will combine them and compound them instead of adding the percentages.

If your BOM has component scrap or routing scrap maintained, the total planned input will reflect a blended loss and not the direct 50%.

The difference you are seeing where your system is planning 1,500 instead of 2,000 usually comes from a few factors such as Costing Lot Size being smaller than planned order, Routing Scrap or Component Scrap being active, MRP rounding profile being active, etc.

I recommend you consider the following actions:

• Maintain Assembly Scrap only in th Material Master (MRP1) and remove any component or operation scrap.

• Align costing lot size with your target yield quantity for example 1,000 pieces.
• Use the Manage Product Cost Estimates app (if your user role includes Cost Accountant) to recalculate cost estimate to ensure a 4 USD/unit cost.
• Use Monitor Material Coverage app to validate MRP result, planned order quantity should now reflect the full 2,000 pieces.

This configuration ensures your system fully reflects your 50% scrap in both planning and costing while remaining compliant with the public cloud best practices.

Let me know if you have further questions.

Best regards

Chris