What are By-products and How to Manage Them?

Origen: What are By-products and How to Manage Them?

For this blog we are unpacking What are By-products and How to Manage Them?

By-products are secondary products produced when manufacturing another product.

Examples include:

Honey used as a component in a primary product. The left over honey frozen and reused in another product
Sheet metal is cut for a primary product. The scraps are used for smaller primary products

By-products are defined on the Bill of Materials with a component type of By-product.

When the Valuation = "yes" then the value of the by-product is taken into account when calculating the standard cost of the product.

The calculated standard cost will be reduced by the value of the By-product when Valuation = "yes"

When the work order is created for the finished product, the By-product will appear

What happens when a By-product is processing?

MRP a suggested By-product working record is created for the By-product and increasing the stock record.
Work Orders, a firm By-product record is created for the By-product.
Production tracking, it is tracked with the manufactured product.

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