Rework Order for Process Manufacturing

[Former Member]

Dear All,

Could you please let me know the process of Rework Order process for Process Manufacturing Industries and what is the impact of same in Product Costing with Financial entries.

I would like to know more how cost will be calculated for rework orders and also whether material standard price will be get updated or else it will be Variance calculation will happen through T.code - KKS5 or KKS6.

Once we variance calculation at month end after running settlement where the cost will flow.

In case if ML is activated what will be the impact.

If you guys have any documents related to the same , kindly mail me to grvsurana@gmail.com

Regards,

Gaurav Surana

[Eagle1]

can KKS5 be run weekly out of test? should i try to fix the errors weekly while i get the detail in test and then run it out of test? what is best practice? I also have to check the Production Cost Analysis for variances and TECO orders. If i run kks5 just on test would the variance be incorrect?

[surendra_kotha]

Hi Gaurav surana,

The financial Impact is same for production order or process order, I am very much familiar with production order so explaining the course of action at production order for rework.

Create an operation in routing for rework by selecting the control key relevant for rework, and confirm the rework operation... by giving materials and activities to the selected operation. the cost related to the unexpected rework order will be posted as variance for materials as Input Resource usage variance and for activities as Input Qty variance. and settled to PRD account while settling the variances. no change to standard cost estimate. working with Production or process order doesn't change the Std cost estimate.

and there are other options are also available for rework of production order.... please find the below link.

Rework in Cost Object Controlling - Cost Object Controlling (CO-PC-OBJ) - SAP Library

For Material ledger - For raw materials consumption ML document will be posted as consumption to Production order and For Finished Goods as Receipt against production order/material. we need to run revaluate consumption , WIP revaluation and Post closing to update the variances to FG and need to execute mark material prices for revaluation of Std cost by considering variances, if you want to consider the new periodic unit price created by actual costing as Standard price for your FG.

Thanks and Regards,

Surendra kumar kotha FICO.

[suma_mani]

Dear Gaurav,

Could you please let me know the process of Rework Order process for Process Manufacturing Industries and what is the impact of same in Product Costing with Financial entries.

    1. Create Rework Process order

    2. Issue goods with respect to process order ( For Defective material)

    3. Goods confirmation for production activities

    4. Post goods receipt with respect to process order.

The cost associated with rework process order will be settled as material variance.

Regards

Mani Kumar

[Former Member]

Dear Mani,

I totally agree with your points that GI and GR will happen however what i am looking for is that if material variance is happening than definitely cost will be capture some where whether its is secondary or any other cot objects.

I would like to know the impact of same with entries.

Also let me know how many types of Rework order are there in normal business scenario?

Rgds,

Gaurav Surana

[suma_mani]

Dear Gaurav,

Please be note FI entries flow similar to normal process / production order only. All material variances should be settle to cost object as order only.

Regards

Mani Kumar

[sanju_ms]

Hi,

KKS6 is run for the material wise variance calculation

KKS5 is for plat wise variance calculation

https://scn.sap.com/thread/3170487

kind regards,

Sanju M S

[Former Member]

Dear Sanju,

Thanks for your reply. I would like to know more on process by steps for rework order relates to CO-PC.

At the month end when we do settlement of actual Production or Process Order cost will follow where?

1. Whether it will just capture the variance and post the same to respective P&L or BL ledgers or it will be to cost centers?

2. Or else it will update the Material (FG) Standard Price?

Kindly let me know your view guys.

Rgds,

Gaurav Surana

[sanju_ms]

Hi,

In variance settlement will reflect on the secondary cost element.

Once the production / process order confirmation settlement will reflect the standard price of particular material or group of materials.

regards,

Sanju M S

[Former Member]

Hi,

In-case if Original Process/Prod Order have been settled  and cost is released, material price will be get updated , however if any rework order will be there than how system will behave for the same?

What will be the entries which will occurred during course of action?

In case if Material Ledger is active than what will happen?

Normally we release or update standard cost estimate once a year or monthly its depends on client but what does SAP best practice suggest for teh same.

Appreciate your quick response on the same.

Rgds,

Gaurav Surana

[Former Member]

Any Update Guys?