During the course of manufacturing a product that the company sells to its customers, there are often additional...
By submitting your email address, you agree to receive emails regarding relevant topic offers from TechTarget and its partners. You can withdraw your consent at any time. Contact TechTarget at 275 Grove Street, Newton, MA.
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.
When deciding to categorize an additional product as either co-product or by-product, the person who manages product-cost controlling in the company determines how these products are treated financially. Table 1 can help in the decision-making process and also the efforts involved in some of the relevant settings in the SAP ERP system.
ABOUT THE AUTHOR
Jawad Akhtar is the author of the SAP PRESS book Production Planning and Control with SAP ERP. He is the head of SAP delivery in AbacusConsulting, where he focuses on logistics and SCM issues.
Dig Deeper on SAP SCM software
Related Q&A from Jawad Akhtar
Web-based Project and Portfolio Management gives teams a way to pitch ideas and manage projects, but on-premises Project System still fits into the ...continue reading
Project and Portfolio Management software from SAP can help companies manage business ideas and lighter projects that don't require tight financial ...continue reading
SAP Investment Management manages a wide array of project-related budgets within the Project System. Here's a deeper look at what it offers.continue reading
Have a question for an expert?
Please add a title for your question
Get answers from a TechTarget expert on whatever's puzzling you.