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Former Member

Customer Scrap

Hello All,

I came accross with a new reqt. The reqt is as below,

We do third party business at our plant . Third party menas we do subcon activity. Some of our nearest place companies sends

us some material for turning process though they do not have machining facilty at their shop.

We receives the raw material from those company & we carried out machining to that raw material. But during operation the boring gets generated. After the machining we used to sales the fininshed material to customer with sales order processing but

now a days the customer demands to send the boring generated while maching.

How can i return the boring to customer ? I can not create FOC sales order as this raw material I have not purchased..

Please let me know the soulition for above case.

Thanks in advance.

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2 Answers

  • Best Answer
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    Former Member
    Jun 21, 2010 at 09:45 AM

    Hi Shailesh

    If I understand the situation correctly, you receive a raw material from your customer. You machine to create a finished article, and have the "off-cut" as well.

    Until now, you have only paid attention to the finished product.

    It seems to me that this is a PP problem, and that you need to create a BoM that yields a finished product (or semi-finished) and a by-product or co-product.

    Once you have this in place, you should be able to book the off-cut into stock and send it back to your customer.


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  • Jun 21, 2010 at 09:38 AM

    How do other companies sent materials for operations to you ?

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    • Mention operation scrap quantity in 57F4 Challan itself.It is standard practise to mention scrap in 57F4 Challan itself.

      It is also easier to reconcile material against challan and also instructs customer to bill you for right quantity for which

      operation is done.