Business Impact If BOM header and Routing is created for ROH

[former_member698082]

Dear All,

I am at client side doing Re-Implimentation of PP module.Here my previous IP has allowed BOM and Routing to be created for ROH materials.What might be the reason??

One of the main reason will be reporting wise there might be difference between ROH ,HALB and FERT because the price control is 'S' for this type of ROH

Routing I'm sure its of no use since the procurement type is F

I have one basic doubt.

If I allow in all material types for BOM(OS24) and routing (OP50), I can create BOM and routing for raw materials.

For Example For Raw Material 'X'

Following parameters are maintained ;

Procurement type: F

Price control : Standard price S.

What might be other business impact if I maintain like this??

Will there be any impact on MRP run ? Or else any other issues??

Regards,

Shettyz

[former_member184655 · Accepted solution]

Dear Shettyz,

Instead of telling those materials as RAW,some times a material type say ZRAW can be used with a different valuation

class ,not used by the normal RAW materials.

Those materials may be produced sometimes in the factory and sometimes may be procured from an external vendor.

This is the general reasons for allowing to create BOM and routing for those materials.

Regards

Mangalraj.S

[former_member698082]

Hi Girish/Mangal,

I know we can allow creation of BOM and Rouitng if the procurment type is both.

But here procurement type is F and not X.

And if the procurement type is F you cannot produce inhouse.

I have explained the client the same that its of no use of defining Routing for the same since the procurement is always external.

OK BOM to certain extent its agreed that if its subcontracting then he may maintain with F with spl.procurement key or Sub contratcting PO.

Now my client just wants to know what might be the other effects of it..

Like inventory valuation or some erroneous MRP run etc..???

Re,

Shettyz

[Former Member]

Dear shetty

It will make effect at time of standard costing of material but its again depend upon confg setting.

So tell your client if you r maintaing the the routing for raw material system will cosider the operation cost it will effect to your costing. so you will not get accurate result.

Rgds

[former_member698082]

Harish,

You are missing the point which I have written in my previous reply.

If the procurement type is F you cannot produce inhouse,which means that you cannot create production orders.

And if the production orders cannot be created where does routing and standar costing come into picture?

My concern is only how to tell client that though BOM/Routing are created with procurement type F and price control maintained as S,how does it affect the business??

[former_member196398]

Shettyz,

1. How is the standard cost updated for this material? If for the ROH Material type in OMS2 with quantity structure is active, then system would look for the quantity structure (BOM & Routing). Is it manually maintained using MR21?

2. Inventory would always be valued based on standard cost, so any cost difference during GR would directly hit the price difference account...which may be a problem.

3. I am unable to understand what these BOM components are? Are they atleast procured? or is it again dummy?

I would suggest you to explain the business scenarion of this client to use to understand more and suggest. Otherwise we may go wrong, there must have been some justification in what has been done intially.

Regards,

Prasobh

[Former Member]

Hi Sheetyz,

1 you can allow to create BOM and Routing for ROH material ,the reason may be the material is Produced inhouse as well as Procured from outside and controlled by valuation type

2 for reimplementation treate such material as a Semifinish material and Price controller as a V ,for ROH material you can create BOM and Routing but as a consultant that should be sugested ,as its raw there is no need to create BOM and Routing for it and it also give clear idea to your user,

Regards

Girish