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Author's profile photo Ameya Beri

Summary – Different Types of Scrap in SAP PP & Net Scrap Indicator

Below table provides a summary of different types of scrap in SAP-PP and their impact on production orders.

Type of scrap Scenarios when it can be used Can be maintained in Impact on Production Order
Assembly Scrap When the material is an assembly, and there is some loss when producing it, example to build a quantity of 100 EA, there is a loss of 10 units, so the assembly scrap is 10% . MRP 1 view of material master, applicable when the material is a BOM header material Increases the production order quantity, and increases the required quantity of components
Component Scrap When the material is a component, and is used as a part of an assembly and there is a loss when using that component. When using 100 EA of a component if 10 units are lost, then component scrap can be 10%

MRP 4 view of the material master, if maintained in MRP 4 view, this component scrap is applied to all BOM where the component is used


At BOM line item level, if entered in BOM line item level, then component scrap only applies to that BOM.


Note if the value of component scrap is maintained in the BOM line item, then this value takes precedence over the material master field.  If blank, SAP looks at the material master.

Increases the value of component quantity
Operation Scrap When there is loss in processing an operation and subsequent operation quantities need to be adjusted.

Routing operation step indicates quantity consumed.


BOM line item, indicates quantity used.


It overrides the Assembly scrap in the Routing.  If entered, then the “Net Scrap Indicator” must also be set.

If used in routing, decreases the operation quantity of the subsequent operation.

























Net Scrap Indicator:

This is in the BOM for each component.  It specifies whether to ignore the Assembly Scrap setting in the header material for this component.

It is required if you enter Operation scrap.

It is needed if you want to ignore Assembly Scrap.

It is optional if you only enter Component scrap

Thank you for reading 🙂

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      Author's profile photo S Abinath
      S Abinath

      good info.. keep writing...

      Author's profile photo Michael Livingston
      Michael Livingston

      Thanks Ameya.

      In addition to the scrap that occurs during manufacturing, we need to plan for other scrap that occurs before or after manufacturing not part of direct cost (vendor quality, expired inventory or warehouse damage being scrapped, inventory adjustments/cycle counting, etc.).

      Based on historic usage of 551 (scrapping) movement, we can estimate this separate "scrap" factor. But how do we incorporate this into SAP planning?  If we use Operation/Component/Assembly Scrap, then it impacts the product costing standards and production order variance reporting. 

      I'd prefer to not have 2 BOMs (costing vs planning).

      This is a general SAP question, but we are specifically using S/4 HANA with embedded PPDS if that adds any options.


      Author's profile photo Ameya Beri
      Ameya Beri
      Blog Post Author

      Hello Michael Livingston  - Thank you for reading my blog post. Have you tried adding this type of scrap into normal production BOM, using a change number with a release key which is only released for planning ? This will make this change visible only to planning and not to costing and production. I plan to write a future blog post explaining how Engineering change management and release keys work.

      Let me know your feedback.