During the course of manufacturing a product that the company sells to its customers, there are often additional products that are created in the process. Some of these additional products are of significant financial value and therefore desirable to the company. The company can sell such additional products as standalone products, or even use them in other production processes. Additional products with significant financial value are known as co-products. Undesirable or low-value additional products produced in the manufacturing process are known as by-products. Both of these products are inventory-managed in the system. Co-products and by-products differ from scrap, in that scrap is charged off to the cost of production and is not inventory-managed.
A high-level overview is available at SearchSAP (Registration is FREE) is here.
If you are a subscriber of SAPexperts (SCM) hub, you can read the complete article including the steps involved in catogorizing materials as co-products or by-products here.
There's also a chapter in my SAP PRESS bestselling book dedicated to handling co-products and by-products . The details of the book are:
SAP PRESS BOOK: Production Planning and Control with SAP ERP
Below are all the important links in one place:
Until next time,
Jawad Akhtar
