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Inventory & GI value of HLAB calculate based on std price & Activity price respectively

Hi All,

This is manufacturing process with MTS strategy (40) and follows Product costing to calculate the price of in-house produced material (HALB/FERT).For example, finished material “WXYZ” will be produced by using 4 operations, we have maintained separate part number for every of operation output (HALB) like “W”,”X”,”Y”,”Z”. All material have BOM, routing and its activity cost. “W” having component “ROH1”, “X” having “W”, “Y” having “X”, “Z” having “Y”, “WXYZ” having “Z”.The problem here is “The consumption of the semi finished materiel GL” value is huge than Finished material inventory GL while doing the production operation (GI, Confirmation, GR)

  1. If I make the costing indicator as not relevant in BOM for the material “X”, “Y”,”Z”, system will calculate only operation cost for these material. I have also changed the BOM for “WXYZ” components as “ROH1”,”W”,”X”,”Y”,”Z”. So proposed the std price for all the material but “X”, “Y”, Z” having only operation cost.

Issue : My inventory value shows as very low value for the materials “X”, “Y” , “Z” as well as depended requirement will be calculated twice while running MRP for the materials “X” and “ROH1”

How to map this scenario? My inventory value wants to calculate as per std price but while issue the material(HALB) for production, system will consider only operation cost. In this case for the first HALB “W” will be considered “ROH1” price with activity cost for remaining “X”, “Y”, “Z” materials it will be considered only activity cost. Correct me if I’m wrong. What was the best practice for this scenario

Thanks

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  • Posted on Sep 24, 2013 at 05:37 AM

    Hi SKA SKA,

    What if you maintain a single BOM of WXYZ with ROH1 as component, and a Routing containing 4 operations? This is simpler than having so many SFG stages.

    Can you please elaborate why you need so many SFG stages? That will be helpful to understand what you are trying to achieve.

    Best Regards,

    Rajen

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    • Hi SKA SKA,

      What I tried to mention from the very beginning, is the balancing of GR credit and consumption debit to the higher level for the SFG.

      I would like to know the process you are using to check consumption GL cost. Maybe you have selected only the debit entries or any other filter, I cannot comment on the same until I understand the process you are using.

      Suppose I have created one SFG stock by means of production order GR. There may be two cases:

      (a) it is further consumed in the higher assembly, thus balancing out the stock credit.

      (b) not consumed, and inventory of the same value.

      Please let us know the way you are checking. I hope you have tested the scenario as I have described earlier. You may also test by increasing another level; tracking and grouping the entries in spreadsheet for analysis.

      Best Regards,

      Rajen

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