Nearly in all manufacturing environment there would be some or other form of rework.
I) Rework Production Order-Stock-Procured material
This scenario is executed when material which are bought out from vendor are found faulty. These materials rather sending back to vendor for corrections are done rework in manufacturing unit itself.
For these materials, rework production order is created through which cost can be captured and debited to Vendor. These costs are colleted on Cost center Rework and settled on cost center.
Any quantity to be scrapped can be removed from inventory and charged to profitability analysis with a special movement type 551 through Quality Processing.
Quality Lot Processing
Inspection is to be done on Lot generated and Materials which are found defective send to REWK Storage location as Blocked Stock
Material received in Quality Stock from Purchase order Goods receipts and found defective which can be rework in house.
Inspection Lot Processing is over and Usage Decision is done. Quality stock is posted to "Unrestricted" stock and "Block stock" which is to be reworked.
Create Rework Production Order
Creates rework order to correct defects. This order will be without reference to material so that cost will be captured on to rework Cost center
Easy Access Path Logistics > Production > Shop Floor Control > Order > Create > Without Material CO07
On the Header screen, make following entries Order Text (Enter PO number and material Component Number for reference)
- Quantity (rework qty)
- Base Unit of Measure
- Finished Date of Order
Now on the Maintain Settlement Rule: Overview screen, Enter
| Field name | Value |
| Cat | CTR Account assignment category |
| Settlement Receiver | Rework Cost Center |
Then go to Operation details in operation overview to go in operation details.
Update Work Center as Rework work center in the operation details where the rework operation is carried out with standard values.
Now in the Component Overview check that no components are exists. Enter Component code (same manufactured material code) with Quantity and item category as L. Enter storage location of Goods Issue. Enter Operation number to which these components will be consumed.
Release order by clicking release button and Save.
Production Order for Rework is created. Observe different number range for rework production Order.
Goods Issue to Production Order
All components required for Production Order are in Inventory with required quantity Components required for Production are issued to orderTransaction Code MB1A Movement Type 261 for Production Order reference.Enter Production Order to Issue Goods.Goods required for Production Order are issued.
Completion of Confirmation of Production Order
After physically completing Production Order Operation work, an operator needs to enter in the system as Operation done. This activity is carried out to enter Confirmation of Operation in the Production Order.
Transaction Code CO11N all operations in Production Order are confirmed here.
Technically Complete Rework Order
After completing confirmation of all operations in rework order, user needs to give status to order as it is Technically Complete so that all cost incurred on to Rework Order can be settled to Cost Center
On the Change Order Header screen, on Menu Bar go to Functions > Restrict Processing > Technically Complete. System Updates TECO status to Rework Order
Transfer Posting of Material from Blocked to Quality
After Rework is done, material from blocked stock will be transfer to Quality stock for inspection.
Transaction Code MB1B
Movement Type 349
Enter material code, and quantity.
Stock of Material is transferred to Quality Stock from Blocked stock
Quality Inspection
This Activity is carried out for inspection of material in the Inspection lot.
Inspection Lot must have generated. Sample calculation must have done.Easy Access Path Logistic > Quality Management > Quality Inspection > Work List > Inspection > Change (QA32)
There are three major steps to follow for Inspection Lot Processing.
- Result Recording.
- Defect Recording.
- Usage Decision and Stock Posting.
Inspection Lot Processing is over and Usage Decision is done. Quality stock is posted to "Unrestricted" stock.
Production Order Cost
This activity you need to carried out to check rework production order cost so that the same can be debited to vendor.
Easy Access Path Accounting > Controlling > Product Cost Controlling > Product Cost by Order > Information System > Reports for Product Cost by Order > Detailed Reports > For Orders Transaction Code KKBC_ORD
Product cost by order can be known.
Debit Note to vendor
To posts the Debit Note to the Vendor. GL & Vendor Master should be present. Prior steps have to be completed.
Easy Access Path Logistics > Materials Management > Purchasing > Purchase Order > Follow on functions > Logistics Invoice Verification
Transaction Code MIRO
On first Screen, select in Transaction "Credit Memo", enter PO Reference as P.O. No., Document date, Baseline Date for Due Date Calculation, enter amount in amount tab Simulate the same & save the document.
II) Rework Production Order-Stock-Manufactured material
When operation is completed it has to enter in the system as confirm for completion. Now in this activity out of total quantity some quantity is yield and some quantity can be reworked is observed
Easy Access Path Logistics > Production > Shop Floor Control > Confirmation > Enter > For Operation > Time Ticket
Transaction Code CO11N
Here define actual yield and the rework quantity and Reason for Variance
Create Rework Production Order
Defective finished material stock is lying in store which can be reworked
In this activity, Production planner creates Rework Order to produce finished material from defective rework able material. In this activity defective material is consumed and finished good material is produced.
Easy Access Path Logistics > Production > Shop Floor Control > Order > Create > Without Material CO07
- Quantity (rework quantity)
- Finished Date of Order
Now in the Component Overview check that no components are exists. Enter Component code (same manufactured material code) with Quantity and item category as L. Enter storage location of Goods Issue. Enter Operation number to which these components will be consumed. Release order by clicking release button and Save it.
Goods Issue to Production Order and Completion of Confirmation of Production Order same as explain above.
Goods Receipts of Finished material from Rework Order
After Confirmation of all operations, Header material produced. This Material is posted into stock against Production Order.
Easy Access Path Logistics > Production > Shop Floor Control > Goods Movements > Goods Receipts
Transaction Code MB31
Movement Type 101
After this Finished Material is updated in Quality Stock.
Quality Inspection
Carried out for inspection of material in the Inspection lot in QA32.
Inspection Lot Processing is over and Usage Decision is done. Quality stock is posted to unrestricted stock.
III) Subsequent Rejection of Bought out items
If you want to return processed goods to the vendor for some reason (for example, line rejections), you can use this function to return the goods. In this case a return purchase order is created and goods are returned to the vendor with reference to the return purchase order.
Material return to store when found faulty
This activity is carried out when the goods are rejected on the shop floor/ Transaction code MB1A here enter the Movement Type 262, plant, storage Location, the order no, Material no and quantity. Post the document. The material issued is returned to the stores.
Check Production Order for Accumulated actual Cost
To determine the Cost to be debited to Vendor, due to rejection. Easy Access Path Accounting > Controlling > Product Cost Controlling > Product Cost by Order > Information System > Reports for Product Cost by Order > Detailed Reports > For Orders Transaction Code KKBC_ORD
On the initial screen, enter the Production Order No. and press Enter. In next screen, in menu option, Select Go to -> Cost -> Analysis.
You get Actual Cost incurred to be Debited to Vendor.
Return to Vendor
As material is rejected you need to create a return purchase order
SAP East Access Logistics > Materials Management >Purchasing > Purchase order >Create > Vendor/supplying Plant Known
Transaction code ME21N
On the create purchase order screen enter the Vendor, Purchase Organization, Purchasing Group, Company Code, Material No, quantity, Plant. Maintain the price select the condition tab at the item details and maintain the gross price, if required maintain other conditions as required. Return purchase order is created
Once the return Purchase order is created, release the PO by transaction code ME28. With reference to this PO the material is send back to the supplier by using through MIGO. Goods posted is reduced from the inventory stock
With reference to this document if required excise invoice can be generated and the excise entries can be taken care of by transaction code J1IS.After that post the debit note to vendor through MIRO with reference to purchase order created.
Three different scenarios discussed for the rework cycle as per the business requirements, till there are another types of rework that occurred on the shop floor, we will discuss in next blog.
