Discrete Manufacturing

[DSD]

Hi,
Can anybody through some light on my following querry.

In a Foundry if one wants to handle it through Discrete Manufacturing only in that case how to take care of By -Products generated in Foundry Manufactring from castings.How to handle the scrap which gets generated from the castings?

 

[Krofire.com]

If you can't handle scrap as a By-Product then it no longers exists as a part in Inventory when it is scrapped. So, you have several choices, either treat it as a Part on the Parts List and reverse Issue it back into Stores, OR, Scrap it as Finished Goods and the Reclassify the Stock as an Inventory Transaction.

Or you could handle it entirely off the ERP system. The last alternative is to just to Adjust on the Inventory.

Either way you need to ask yourself about the benefits and the drawbacks of handling scrap on the ERP system. Is it worth a lot? Do you sell it or use it as an Ingredient elsewhere?

 

[DSD]

Thanks a lot for the guidance.The thing is that we recycle (remelting )the scrap (runners & risers )and use it for the manufacturing of new castings.

In that case would you like to add ?

 

[Krofire.com]

I believe the term "revert" is used for this kind of material. You cannot, or course, use such By Products as Ingredients in the same Process. However, you can treat it as an Intermediate in which case it is produced and absorbed by the same Process.

However, it sounds as if you probably collect it up and put it into Inventory. In this case you are probably best off Adjusting it into Inventory as the Ingredient Part Number (in the absence of Process Mfg). With Process Mfg you can complete it as a By Product as a different part number and Reclassify it in Inventory (as a suggestion).

 

[Bill Meyer]

Further to the previous answer you may consider the following which will also keep the accountants happy.
Create a Part number to identify the "scrap" resulting from the process... Call it Revert item # xxx
On the bill of material for the runners and risers enter Revert item xxx with a negative quantity representing the average scrap weight resulting in the manufacturing process of runners and risers... say it is 5% for example.

When the IC is completed for runners and risers the system will create a debit to inventory for Revert Item # xxx. So from a cost perspectice the system correctly adjusts for the positive inventory and values resulting in a negative IM issue..
Next, in your processes when you are creating a work order for base steel (?) going thru the foundry, do a manual material issue for the Revert item # xxx ( based on material weighed). This will correctly reduce the inventory of Revert item # xxx and theoretically make the consumed base raw materials going into the foundry more accurate as it will now include base raw metals and the consumption od scrap materials.
The cycle is now complete.
Inventory is corect.
Costing is correct
Work order reporting is correct
The company has access in the system to quantity / costs of
scrap and re-processed materials and the cost to convert them back to re-usable materials to create runners and risers.

On the bill