By-Product vs Co-Product in SAP BOM
Main difference between By-product and Co-product
- In case of Co-product costs are settled with a apportionment structure. In case of By-product the price of this by-product is credited to the order or the material stock account of the lead material being manufactured.
- Co product is produced with ur main product and u have to define apportionment structure in material master . when both products are equally important then they can be a co-product .
By product is like awaste for that u have to not defined any apportionment structure in material master it's value is less as compare to main product
In BOM u can define both of them by negative sign
In co-product u have to put one extra indicator which shows co product
u can do this by selecting the material in bom then go to detail and tick mark the box which shows co product
- A co-product is produced alongwith with a main product and carries equal importance as main product. Whereas a by-product is not a planned product and is produced after carrying out the process eg. ethanol is a byproduct of a sugar industry. U need to define both in BOM.
- Co product must have costing value, must have a settelment rule and mandatoray with main product.
BY product has no costing and satelement rule.
bulk product....MRP run can not consider the bulk product.
How do you differentiate them in a BOM
Co-Product as well as By-product are defined as BOM Components/Items. Both of them have negative quantities. ( Not all negative quantity items fall under these categories!). When BOM is created for FERT , you can see one indicator in COMPONENT DETAILS screen for co-product. You need to define the co-products with this special indicator .But the way diffrentiate in any industry is that if you are going to accept the orders for a negative product in BOM and going to plan for it then it has to be Co-Product. Because it has a cost valuation. If you are not going to plan for it and will sell in open market or discard it as per situation then it has to be by product.
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