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BOM triggering

Former Member
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126

Hi,

I am the following scenario:

Growing Plant: Procuring CHICK from outsource and breeding them by proper medicine and food, now after few weeks these chicks will be grown up as CHICKEN.

So how to match the above procedure in SAP without taking PP module into consideration. My thinking was like this:

1.Create CHICK as raw material (CHICK which we are procuring from outsource will be taken as Raw material).

2.Create FEED as raw material (which we will use for feeding up the chick)

3.Create MEDICINE as raw material or medical material type (which is used for medicating the CHICK)

4.Create CHICKEN as semi finished product.

5.Create BOM for CHICKEN taking chick, feed and medicine as components.

6.Create a PO for procuring chicks to Growing Plant.

7.I need to explode / trigger the BOM (CHICKEN) where the output product is chicken with the consumption of the components (CHICK, FEED, MEDICINE).

8.At step 7,,,,, can we do any BOM explosion or triggering without doing any MRP Run, Planned Order, Production Order.etc.,

regards,

urendra

Accepted Solutions (0)

Answers (2)

Answers (2)

Former Member
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Hi,

I don't know why subcontracting was mentioned in the previous reply? this has no relation to subcontracting whatsoever because the whole process i taking place in your premises and by you, no subcontractor is involved (well you haven't mentioned it anyway)

I am not sure that a BOM is appropriate in this scenario either?

A BOM is relevant when you ahve a know qty of ingredients that when combined make a specific finished product.

In this case the qty of feed and medicines will vary and the end result will be a "chicken" no matter how much is used (the weight may vary but even this is not ALWAYS proportional to the amount of medicine or even feed, some birds will grow bigger than others).

So I would not use a BOM I would simply use 309 movement types to convert the chicks to chickens. I would then post the costs of the medicine and feed (electricity, cleaning, inspections) etc to a profit center, cost centre or internal order.

that way you will have a central cost collector that you can use to determine the cost 9and eventual profits) for that batch (internal order?) of chicks.

The BOM function is not quite as good a fit as it should be in this case because of the varaibles concerning live animals that grow (and die) randomly.

Steve B

Former Member
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Hi Steve,

u r correct,,,subcontracting will not work with my requirement, and as u said to use 309, i need some clarrifications.

while creating material CHICK , moving avg price taken as Rs. 1/- and for material CHICKEN moving avg price taken as Rs.50/-. my doubt is if we do stock transfer between two materials what about the value:

material - qty-- material price -


total value

CHICK -


10 -


1.00 -


10.00

CHICKEN-10---- 50.00 -


500.00

at the above example if u observer i want to know once u do stock transfer between two materials whether the value will also be updated with stock? and as i said this process will be carried out continuously, will the price of CHICKEN will be updated with receipts (from CHICK) and issued to other storage location of other plant.

Coming to feed and medicine we can issue to some cost center, but is there will be any link between the CHICKEN, feed, medicine i.e my user want the situation in such a way that CHICK is growing up to CHICKEN with the intake of feed, medicine so if we see CHICKEN accounting details can anywhere can we get feed, medicine,,, as i explained u i am going to create feed and medicine as separate material masters.

thank you,

regards,

urendra

Former Member
0 Kudos

Hi,

I am happy to help, but this is becoming more of a case of designing the whole solution.

I like the challenge of finding a solution to something like this but it requires a LOT of effort to come up with a fully workable solution.

As for the problem you mention regarding the values and 309 movements etc. yes the value of the chicks will be passed to the value of the chickens but that is what is happening in the real world.

The feed and medicine are not really components, they are more of an overhead cost such as heating and cleaning of the growing area and you don't appear to be adding these as components either.

the question is are they direct costs (i.e. components) or indirect costs (i.e. overheads). The problem is that they appear to be direct costs but they could also be considered as indirect. Yes the feed and medicine helps them grow but these are required as overheads and the chicks grow into chickens over time (as long as you give them the environment in which to grow and the environment is maintained by overhead costs)

So you should either keep it simple and manage the financial effects separately or try to achive a complex BOM and "production" process. I know which one I would prefer to have to operate as a user.

Remember that the MAP is simply a stock valuation price and not necessarily going to reflect the actual cost of the item. So if this is not accurate then it is not necessarily a "show-stopper". Especially as there are other options available to counter this problem.

Instead of a 309 you can simply write-off the chicks at the cost value and then write-on the chickens via a 501at a value of the cost of the chick plus the cost of the feed and medicine (by entering this value in the "value in local currency field")

I am not saying that the BOM solution is wrong, I am just saying that it does not feel like it reflects the actual process. chickens are not manufactured from components, they grow with the HELP of components such as feed and medicine.

This is a difficult scenario to get right in a "forum". It requires significant analysis and validation of solutions. So all we can do is to suggest solutions that you can investigate.

One is the BOM option,

the other is the 309 movement option

a final option would be to use a full PP type process with operations, with components etc. issued to a production order and the final value of the finished item would be the value of all of the components issued to that Production order.

Run through a few examples in your sandbox system and let us know if you have any specific queries.

Former Member
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Hi Steve,

Till now my Sandbox is not ready,,, once its ready i will do various trials on it and vl be updating u with more queries.

regards,

urendra

Former Member
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Hi Urendra,

In Subcontracting Scenarios when you raise PO for the Finished Product BOM will explode for the components/materials supplied to the Vendor.

Regards,

Mani