Manufacturing · Daily operations · 7 min read

Scrap and rework

Record material, process and finished-goods scrap, approve large scrap, and send rejected units to rework.

Before you begin

• The order is Released, In Progress or Completed. Scrap on a draft order is refused: 'Scrap is recorded on a running order.'
• You hold manufacturing.scrap.record. Approving scrap needs manufacturing.quality.approve and must be a different person.
• Scrap reasons exist in Manufacturing > Configuration > Other Lists (DAMAGE, SETUP, DEFECT, MACHINE, OPERATOR, EXPIRED and your own).
• The Scrap and rework switch is on for the company.

Steps

Record scrap

1. On the order click More > Record Scrap, or use Record Scrap on the Shop Floor.
2. Choose the Kind: Material scrap (an issued component), Process scrap or Finished goods scrap.
3. For Material scrap choose the Component. The quantity cannot exceed issued, minus returned, minus already scrapped.
4. Enter the Qty, more than zero.
5. Choose the Reason.
6. Leave Normal scrap (stays in product cost) ticked for expected loss, or untick it for abnormal scrap.
7. Add a Note and save.

Approve or reject large scrap

1. Open Manufacturing > Production > Scrap and the Waiting approval tab.
2. Click Approve or Reject on the row.

Send rejected units to rework

1. When registering production, enter Rejected Qty and tick Send rejected to rework.
2. Open Manufacturing > Production > Rework. The request (RW-) is Requested.
3. Click Rework MO to make a rework order, then Accept the good result or Scrap (with confirmation) what cannot be saved.

A quality check with result Rework and a failed quantity also raises a request.

What happens next

• A scrap record (SC-) is Done at once, and the order's scrapped quantity rises, so the remaining quantity falls.
• Normal scrap value stays in WIP, so the good units carry it. Abnormal scrap leaves WIP to the Abnormal scrap expense account (5320 by default).
• If the quantity is above the setting Scrap above this quantity needs approval, the record is Waiting approval and the order's scrapped quantity is not changed until it is approved.

Worked example: the estimated cost is AED 237.875 a table. Scrapping 1 finished table as normal keeps AED 237.88 in WIP; as abnormal, AED 237.88 goes to expense (debit 5320, credit 1250 when posting is on). Scrapping 2 legs at AED 15.00 costs AED 30.00.

Good to know

• Segregation of duties. 'The person who recorded the scrap does not approve it.' Someone without manufacturing.quality.approve is also refused.
• Material scrap over what was issued: 'Only 40 of it was issued to the order.'
• A scrap record waiting for approval blocks closing the order.
• Choose a reason; otherwise 'Choose the reason.'
• Scrap that is not recorded does not reduce the remaining quantity. Record it the day it happens.
• Dashboard Scrap % is scrapped divided by received plus scrapped. One scrapped table with nine received gives 1 / 10 = 10.0 %.
• Reports: Manufacturing > Reports > Scrap needs cost permission; the Production Efficiency report shows yield.