Hello experts,
An appropriate method to update production order quantity is required by which quantity variances may be avoided. Below is the production scenario:
(Industry type - Automotive components, using discrete mfg.)
Although production order is created using planned quantities, business tends to modify (mostly increase) order qty. during production.
Operation-wise confirmation (CO11N) is done, and Order quantities are usually large (1,000 - 50,000 EA) lasting many days of production.
Quantity produced at the end of the final confirmation of the 1st operation is considered the order quantity going forward. The production order is updated with this number in order quantity field.
For example:
Order quantity (at order release) = 8000
Confirmation (Final) at first op = (Yield of 9,000 + Scrap of 100 + Rework of 1000).
Rework is handled separately
Scrap is not added into the new order qty.
Updated order quantity is now 9,000.
Note that the subsequent operations may be in-process before final confirmation of the first operation.
In this scenario when order quantity is updated:
Do the material reservations increase due to increased order qty.? Here the scrap is not added thinking that the material reservation would increase. But we are losing the material when scrap qty. is bigger. (not allowed to maintain scrap% here). I believe the order quantity should always be equal to (yield + scrap + rework) (even if rework is processed in a separate order). Please suggest what would be a better way to handle the order qty. change and also the rework and scrap.
Thank you.