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Yield Loss / Scrap Factor


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In our business we experience yield loss on shop orders. For example, we mix ingredients together and for a 1000 lb. shop order, we know we will experience x lbs. of yield loss and the shop order will yield, for example, 960 lbs. instead of the 1000 lbs. lot size. I have been researching yield loss and am struggling to find an answer to answer my questions.

  1. We want to use scrap factor to increase the requirements for ingredients. For example, if we know we are going to experience 4% yield loss on a shop order, we want the required ingredients to be inflated by 4%. I have seen scrap factor in multiple places within IFS, but am not sure how to do what we are after, without adding, in this example, 4% scrap factor to each ingredient in the product structure.
    1. The second part of this question is that we don’t actually scrap anything out in IFS. We just receive less than the required amount on the shop order. Does that affect the scrap factor use?
  1. When looking at product costs, it seems that the yield loss causes cost variances. We are hoping to find a solution to this where when we know an operation is going to have a yield loss of 4%, the costs are calculated with that assumption, and then the variance would come in when the yield loss is actually more or less than the planned yield loss. Again looking at scrap factor for this as well, but not sure the best way to go about this. Is scrap factor the right approach here, or does anyone have any other suggestions?

 

Best answer by Björn Hultgren

As I previously explained. if you have 10% Scrap Factor on the inventory part and have a demand of 100kg and run MRP, it will give you a shop order requisition to produced 112kg, but the expected supply from this order will just be 100kg. The material requirements will correspond to the 112kg. You can also update the value manually on the shop order.

 

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Björn Hultgren
Hero (Employee)
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Have you tried to set the Scrap Factor on the  Inventory Part of the manufactured part?

Say you put 10% here and you have a demand of 1000 lb, then MRP will plan for a shop order with lot size 1112 lb that is expected to give a supply after scrap of 1000 lb. Components/ingrediencies will be planned for 1112 lb and it is considered in the cost calculation. 

 


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Thank you for your response, Bjorn. I did try putting scrap factor in that field, and it did not change the quantities planned for components/ingredients. Is there a setting somewhere to use that field that I am not aware of? It seems like it should be straight forward, but when I put 10% in that field, it didn’t affect anything, as far as I can tell.


Björn Hultgren
Hero (Employee)
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As I previously explained. if you have 10% Scrap Factor on the inventory part and have a demand of 100kg and run MRP, it will give you a shop order requisition to produced 112kg, but the expected supply from this order will just be 100kg. The material requirements will correspond to the 112kg. You can also update the value manually on the shop order.

 


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