Yield Loss in Subcontracting

[Former Member]

Dear Gurus...

We make the subcontracting PO as follows..

Requesting Mat-1 45 KG

I issue 50 KG of Mat-2

Fact is that, we have to issue 50 KG of Mat-2 and the output material (Mat-1) is only 45 KG

There is a process yied loss of 5 KG in the process.

Problem is, while we make the PO, we have to specify 45 KG for Mat-1 and Process Charge as Rs. 12...but the Vendor charges on 50 KG Qty Issued Material means payable is Rs 50x12 = 600 But system calculates Rs. 45x12 = 540 and only 540 is debitted to the Receiving material price/unit...where as we want 600 to be debitted to the receiving material price/unit...

Can anyone help solve this??

Thanks in advance

Suraj

[Former Member]

thanks a lot

[Former Member]

Hi,

There is no provision to pay the subcontract labour charges on consumption qty. In PO you will be allowed to maintain price for the receiving qty only.

If your ouput-input ratio is fixed, pl. increase the rate proportionally for the incoming material and maintain the same in PO.

In your case divide Rs.600 by 45 and release PO @ Rs.13.33.

Hope this input will be helpful to you.

With regards,

Jeeva.

[Former Member]

Dear Jeeva...

Thanks for the reply....The solution you have told is valid and I have already told the exact solution to the client, but they dont agree, they say that system should automatically calculate it on Issuing qty of 50 KG no matter how much we receive, since till end they wont know how much actually they are going to receive....

Any other way to solve this??

Regards

Suraj

[eduardo_hinojosa]

Hi,

Do you run tcode MB04? (subsequent adjustment of components).

Regards,

Eduardo

[Former Member]

Dear Eduardo...

Thanks for the reply...in MB04 I think its adjustment of components. But in my case we have already supplied 50 KG and we are actually receiving 45 KG of finished product....in MB04 its only for the components...my query is where do we manage the loss of 5 KG ....

Vendor charges us on SUPPLIED QUANTITY of 50 KG and we should distribute this cost on Actually Received Qty 45 KG as I explained in the beginning...where as system is calculating on 45 KG only...

Pls let me know how to manage this...

Thanks in Advance

Suraj

[Former Member]

hI,

12 RS IS your service charge means if vendor haveing service charge 50*12 = 600 then for 45 * 13rs u should apply for service charge.

[Former Member]

Dear Rajendra...

Thanks for the reply....The solution you have told is valid and I have already told the exact solution to the client, but they dont agree, they say that system should automatically calculate it on Issuing qty of 50 KG no matter how much we receive, since till end they wont know how much actually they are going to receive....

Any other way to solve this??

Regards

Suraj

[eduardo_hinojosa]

Hi Suraj,

If your order is 50 and you receipt 45, you have pending orders by 5. If the vendor has wasted all components for 45, you must run MB04. Or the BOM is wrong or the vendor doesnt fit to the plan. So, you can do inventories (ie: tcode MI07/MI09 with the indicator stokc -> parts prov.vendor). Remember that with MBLB you can see your stock of components in the warehouse of vendor. Also, you have the indicator in MIGO or MB01 of Del.Compl.Indicator if actually the pending quantity (5) you will not receipt.

I hope this helps you

Regards,

Eduardo