Skip to Content
avatar image
Former Member

Scrapping via IM

What is the process of scrapping using inventory management (PID) and what are the financial implications of this steps (including pros and cons of using the step rather than issue to scrap)

Add comment
10|10000 characters needed characters exceeded

  • Get RSS Feed

2 Answers

  • avatar image
    Former Member
    Nov 21, 2012 at 04:27 AM

    Hi,

    In standard SAP, we can scrap the material using three movement types,

    551-> withdrawl for scrapping from unrestricted -use stock

    553-> withdrawl for scrapping from stock in quality

    555-> withdrawl for scrapping from blocked stock

    Scrapping  causes a reduction in  the stock and the value of scrapped material is posted from stock account to a scrap account.

    Regards

    Vijay

    Add comment
    10|10000 characters needed characters exceeded

  • avatar image
    Former Member
    Nov 21, 2012 at 08:13 AM

    Thanks but would what would be the pros and cons of using PID for the scrapping process and how to distinguish it

    Add comment
    10|10000 characters needed characters exceeded

    • Former Member

      Using PID for scrap will move the inventory cost to a specified inventory adjustment G/L account, which then appears as any other inventory adjustment without differentiation of scrap vs. other reason for the adjustment. Further, there is often a reserve set for scrap and if the scrap is not processed using the appropriate scrap movement type (as Vijay provided), then the cost will not hit the appropriate account for scrap. Lastly, using PID for scrap can also negatively impact the reported inventory record accuracy metric.

      It is best practice to use the appropriate movement types to ensure the costs move to the correct accounts.

      Regards,

      Moss