Co-Product Planning in SAP APO

[Former Member]

Objective:

The purpose of this document is to explain rationale of Co-product planning and to understand SAP basic configurations required for same.

Definition:

There is thin line between co-product and by-product in manufacturing space.

A co-product is a product that is produced in conjunction with other products. Technically the system creates a separate order item in
the production order for each co-product. As a result, it is possible to display actual costs at co-product level.

A by-product is a product that is produced in conjunction with other products. The system does not create a separate order item for each
by-product. The material valuation of a by-product is always based on the price specified by price control in the material master.

Co-product scenarios are often seeing in Chemicals, Food, Consumer Goods industries. In this article I provided example of Palm Oil
industry.

Typical finished products of a Palm oil industry are: Cooking Oil, Margarine and specialty fats. 

Crude Palm oil is basic raw material for these Products.

Manufacturing Process:

Master Data for scenario script:

Finished Product –COFG01

Raw Material – OLRM01

Co product – STRM01

Locations –

DC-1012

Plant – 1010

Supply Network –

1010 --> 1012

Material Master Settings in ECC:

Activate co product indicator in material master of Stearin.

BOM settings in ECC:

Enter quantity of co product - Stearin as '–ve'.

Production Data Structure (PDS) in APO:

This BOM will be moved as PDS in APO and the Co-product (Stearin) is tag as Output material in PDS.

Supply Planning Process:

In APO:

To keep scenario simple, APO SNP Heuristic used for Supply Planning calculations.

Forecast exists at DC Location 1012 for COFG01.

For FG, based on distribution demand propagated from 1012 location, system suggests Planned Order at 1010 to build stock of 10 Qty.

For Co-product, based on the qty maintained in BOM and demand for FG, system suggests a receipt element for co product:

For Raw material, based on Dependent Demand system suggests Distribution receipts.

In ECC:

(T code – MD04)

For FG Planned order transferred

For Co-product, the receipt element transferred as Dependent Requirement but in positive quantity:

For Raw Material Dependent Requirement transferred in negative quantity: