Customer would like to include a fixed waste quantity for a finished goods in our MRP run so that it creates proper planned orders and raw material requisitions. This waste of the finished good (which is liquid in nature) happens, while the finished good moves from the processing area to the packaging area via a pipe. As such, this waste only affects only the component Raw Materials not the Packaging materials.
The other point is:
The waste of the finished food will be different based on which line they run. Though, the waste of the raw materials will be in the same proportion.
In the existing MRP run, currently the above fixed waste of xxx lbs are not considered. As a result the planned order and corresponding requisitions of the raw material doesn't include this waste. As the production floor knows about this loss, they factor it in later on during operation, but that time, it is too late for planning purpose (requisitions of the raw materials, specifically).
Is there any way (such as in Material Master or somewhere
else in PP), that we can specify a fixed waste for the Finished good, so
that the above calculation (only on the Raw Materials), can happen during
MRP run?
Suggestions:
How 'fixed' is your fixed quantity - i.e. is it (i) the same percentage wasted regardless of batch size or (ii) the same qty wasted regardless of batch size?
Yes. It is always same fixed quantity waste regardless of batch sizes. That is for one process order it will be a fixed quantity. But only the raw materials are wasted, not the packaging materials as this waste happens when the liquid product moves from processing area to the filling/packaging area.
And are all BoM components 'wasted' in the same proportion or do the waste qty of some differ from others = I am not sure, if I am sure about this question. I will try to explain it with an example:
The Finished good (say FG1), which is a liquid product is made of three Raw Material (RM1, RM2, RM3) and one packaging material (PKG1).
Say to keep it simple, RM1 = 20%, RM2 = 30%, RM3 = 50%
FG1 is processed in a processing area using RM1, RM2 and RM3 and is send to the packaging area via a pipe where it is packaged using PKG1.
While FG1 moves through the pipeline there is a fixed waste of 100 lbs no matter whatever is the size of the batch is. This 100 lbs loss is happening in the pipeline as a result it will only effect RM1, RM2 and RM3 not PKG1. For 100 lbs, there is loss of 20 lbs for RM1, 30 lbs for RM2 and 50 lbs for RM3.
The demand is at FG1 level. Say, it is 10,000 lb for a week.
So, for 10000 lbs of FG1, RM1 = 2000 lbs, RM2 = 3000 lbs, RM3 = 5000 lbs.
Say, in that week it was decided to run 5 process orders – one with 6000 lbs, and 4 with 1000 lbs. So total fixed waste is = 1 X 100 + 4 * 100 = 500 lbs. That means, a raw material loss of RM1 = 100 lb, Rm2 = 150 lbs, RM3 = 250 lbs.
So, the Raw material requirement should be, RM1 = 2100 lb, RM2 = 3150 lbs, RM3 = 5250 lbs.
In our existing MRP run, currently the above fixed waste of 100 lbs is not considered in the MRP run and in the planned order and corresponding requisitions of the raw material. As the production floor knows about this loss, they factor it in later on during operation, but that time, it is too late for planning purpose (requisitions of the raw materials, specifically).
