Brendan,
I am guessing you are in the food industry. Within NAV, several of the ISV Add-ons provide this feature out of the box. If you are not using an Addon, and as Marco mentioned, you did not create a customization for it, then you might try this approach which I have used:
By-products are products that are the leftovers from the same process as the production output item. A by-product is the output from a joint production process that is inferior in quantity and/or net realizable value (NRV) when compared to the main products. Because they have no influence on reported financial results, by-products do not receive allocations of joint costs ex. labor. By-products also by convention are not inventoried, but the NRV from by-products is typically recognized as ‘other income’ or as a reduction of joint production processing costs when the by-product is produced. If on the other hand the NRV is comparable to the primary output item then co-products should be used instead for correct cost allocations.
An example is cutting a wooden table. The produced item is a wooden table, but a by product are the wood chips that are cut from the original piece. Some people would think of these chips as garbage, but they can be used as component to a production of a chipboard. Because the chips are not thrown away, but used in another process the cost of producing the wooded table should benefit from a reduction equal to the produced chips.
Production of the wooden table
The components for this production are:
1. A block of wood as normal positive Quantity Per
2. An item for the wood chips as negative Quantity Per
Output of the production is the wooden table.
When calculating the BOM costs of the wooden table it’s
Table Cost = A block of wood – wooden chips + labor.
Let’s forget about labor costs in this example.
Block of wood costs = purchase direct and indirect costs = Unit cost
Wood chips cost = unit cost of the block of wood for the same weight.
It’s not possible to set the cost to zero even though it’s a waste and it wouldn’t be a smart move anyway.
The trick is to update chips costs when updating block costs.
1. Use the production journal to consume block of wood
2. Use the production journal to negative consume the chips. This means putting them on inventory and subtracting the actual costs from the table. The chips should be weighted or something.
3. Output one table – well maybe a plate or some table legs. Whatever you get the point
The labor costs – ok I didn’t forget it – is added to the table and not the chips which makes sense.
Production of chipboard
1. Consume chips and glue
2. Output chipboard
Cost of chipboard is then = cost of wooden block + glue + labor.
That means the chipboard does not include the chipping labor costs which is ok.
Co-Product is a bit like the by-product, however, the Net Realizable Value (NRV) of the leftovers of production is comparable to the primary item. A co-product receives joint-production costs as well as the primary item.
To make joint productions in NAV you can use a family production order. This makes it possible for multiple output items to share the costs.
Create a family route
First you need to create the common route for the family.
1. Go to Manufacturing, Product Design, Routes
2. Create the new joint production route for the multiple output items.
Create the family
1. Go to Manufacturing, Product Design, Families
2. Create a new family and fill out description etc.
3. Add the newly created common route for the joint production
4. Add the joint production output items as output items in the family lines
This route will be attached to the production order as a whole and not to single production order lines.
Create the joint production
1. Go to Manufacturing, Execution, Released prod. order
2. Create new production order
3. Select Source Type = Family and Source No. = family just created.
4. Refresh production order
5. Use the production journal to consume components and output each output item. Input setup and run times for the production, but remember that the time should only be registered for each output if separate time is measurable for each output item. If one output is a by-product of the time consumed on a primary product, the time should only be registered once.
Verify the capacity entries are registered correctly and all items have been outputted.
Hope all this helps.
Thanks,
Steve
Share
Report
All responses (
Answers (
291,280
