3/25/2020 Co-Product and By-product in Production order | SAP Blogs

Community

Ask a Question Write a Blog Post Login

Umesh Mali
November 17, 2014 2 minute read

Co-Product and By-product in Production order

Follow RSS feed Like

14 Likes 30,054 Views 17 Comments

Hello Everyone,,

I wrote this document for basic understanding of Co-Product and By-Product in Produc on order.

Product manufacturing in industry same me other products that are usually manufactured together using one
produc on order. We called that Co product and By product

Co-Product: Co-product is a product, we ge ng this product while manufacturing finished material or main
material. Same material might be used in other material manufacturing process

By-product By-product is a product, we ge ng this product while manufacturing finished material or main
material. The material valua on of a by-product is always based on the price specified by price control in the
material master.
Crea ng a produc on order to manufacture co-products has the following advantages:

Main product and co-product(s) are se led to different receivers

Goods movements can be posted simultaneously for all product manufacturing in the order

https://blogs.sap.com/2014/11/17/co-product-and-by-product-in-production-order/ 1/12
3/25/2020 Co-Product and By-product in Production order | SAP Blogs

1. By- Product.

   

Prerequisite

In BOM maintained negative quantity , Then system automatically will pick as by product.

Crete planned order and converted to produc on order

At me Produc on order confirma on, system automa cally post as By-Product,
By-Product Movement type 531, See below picture

https://blogs.sap.com/2014/11/17/co-product-and-by-product-in-production-order/ 2/12
3/25/2020 Co-Product and By-product in Production order | SAP Blogs

If the by-product is indicated as being relevant to cos ng in BOM, the total cost of the process is reduced by
the costs of the by-products
The costs of by-products are calculated with the net realizable-value method. The costs of the by-products
thus represent a reduc on in the costs of the primary product.
If you don’t want to calculate the cost of the By-product then remove the Cos ng relevancy from BOM Item
detail

2. Co- Product

     Prerequisite

In Material master MRP View 2 select the CO product

https://blogs.sap.com/2014/11/17/co-product-and-by-product-in-production-order/ 3/12
3/25/2020 Co-Product and By-product in Production order | SAP Blogs

In BOM maintained nega ve quan ty for component.

In BOM, item of the components detail select the CO product, if you not select the Co product in Item detail
system consider as By Product

https://blogs.sap.com/2014/11/17/co-product-and-by-product-in-production-order/ 4/12
3/25/2020 Co-Product and By-product in Production order | SAP Blogs

Crete Produc on order

Good movement of the Co Product,
In Co product no automa c good receipt happen
Go to MB31 and enter the Order
In Co product Movement type is 101. See below Pic

https://blogs.sap.com/2014/11/17/co-product-and-by-product-in-production-order/ 5/12
3/25/2020 Co-Product and By-product in Production order | SAP Blogs

You can calculate the cost of goods manufactured for co-products by using an appor onment structure to
allocate the total costs of the manufacturing process to the individual products involved
The appor onment structure is defined in the cos ng view of the material master for the leading co-
product click on joint produc on or in MRP2 view, Click on joint produc on and assigned appor onment
structure
In the appor onment structure, you can use equivalence numbers to control how the costs of the en re
manufacturing process are appor oned for the co-products in percentage in case of mul ple Co product.
If no appor onment structure has been defined for a leading co-product or process material, an error
message is issued.

Please refer below link for more detail of Co-Product cos ng and also consult with your FICO Team.

http://www.scribd.com/doc/109331756/Co-Product-settings-for-SAP-costing

I hope this document helpful to everyone…

Request to all expert suggest and guide if anything wrong in this document

Thanks & Regards

Umesh Mali

Alert Moderator

Assigned tags

MAN Production Planning (PP) |

https://blogs.sap.com/2014/11/17/co-product-and-by-product-in-production-order/ 6/12
3/25/2020 Co-Product and By-product in Production order | SAP Blogs

Related Blog Posts

Joint Production with Process material Overview – Part 1

By Velmurugan S , Oct 13, 2014
Automatic goods receipt for co-products during order con rmation
By Caetano Almeida , Apr 04, 2016

Order Split without Product Cost Collector and By-Product

By Former Member , Feb 02, 2014

Related Questions

Production order co-product

By Renato da Silva , Mar 03, 2016
How settle the cost of by-Product
By Former Member , Aug 24, 2007
movement type for co product
By Former Member , May 29, 2009

17 Comments

You must be Logged on to comment or reply to a post.

Prashant Deshpande

November 18, 2014 at 1:02 pm

Hi Umesh,

Your Document is very helpful and well organized.

Thanks to share with us.

Like (0)

Umesh Mali | Post author

November 18, 2014 at 2:12 pm

Thanks Prashant, 
https://blogs.sap.com/2014/11/17/co-product-and-by-product-in-production-order/ 7/12
3/25/2020 Co-Product and By-product in Production order | SAP Blogs

Regards

Umesh Mali

Like (0)

Suresh Kumar

November 18, 2014 at 1:22 pm

Thank you for document

it is usefull and help me to recall

Like (0)

Umesh Mali | Post author

November 18, 2014 at 2:14 pm

Thanks Suresh Kumar,

For reviewed this document 

Regards

Umesh Mali 

Like (0)

Former Member

May 8, 2015 at 1:45 pm

Thank You, Very useful. This is the only information I could nd on the subject.

Larry Hoag

Like (0)

Umesh Mali | Post author

May 18, 2015 at 5:48 pm

Thanks Larry.. 🙂
https://blogs.sap.com/2014/11/17/co-product-and-by-product-in-production-order/ 8/12
3/25/2020 Co-Product and By-product in Production order | SAP Blogs

Like (0)

Former Member

May 19, 2015 at 1:14 pm

Nice Document…

Umesh, what will happen if same co-product has its own BOM, I mean it will also produce seperatly..how we will
do the con guration?

Thanks

Sastry

Like (0)

Amit Sharma

November 16, 2015 at 10:08 am

Hello Umesh,

Very well explained document..!!!

Thanx for sharing.

Regards,

Amit

Like (0)

Umesh Mali | Post author

November 19, 2015 at 5:54 am

Thanks Amit..

Like (0)

https://blogs.sap.com/2014/11/17/co-product-and-by-product-in-production-order/ 9/12
3/25/2020 Co-Product and By-product in Production order | SAP Blogs

Former Member

November 19, 2015 at 7:17 am

just wanted to con rm one thing.

whether by product is considered to be scrap??
or it can be used in any form.

Like (0)

Umesh Mali | Post author

November 19, 2015 at 9:21 am

Hello Shreyas,,,

you can consider the by product as Scrap and adjust the quantity at the time of con rmation.

There is many more form we can you as By Product according to business requirement.

You can set by product as costing relevant and non costing relevant.

Regards
Umesh Mali

Like (0)

Former Member

November 19, 2015 at 6:54 pm

thanks for the information

Like (0)

Chandra Shekhar CL

June 27, 2016 at 6:13 am

Hello umesh,

Thanks for your wonderful document.

I have one doubt.

Is there any possibility’s to maintain By-Product for Finished product…??

https://blogs.sap.com/2014/11/17/co-product-and-by-product-in-production-order/ 10/12
3/25/2020 Co-Product and By-product in Production order | SAP Blogs

Like (0)

Former Member

January 30, 2017 at 6:49 am

Excellent Document

Like (1)

Umesh Mali | Post author

March 8, 2017 at 10:50 am

Thank you Meenakshi 🙂

Like (0)

Andy Yeri

May 12, 2017 at 3:09 pm

Hi Umesh,

Clear explanation, good. I think we all know that the starting point for the main product’s production could be its
Sales Order or PIR’s/Forecasts. When the Main prod is made, the co-prod is automatically produced too. My
question is, what if we receive demand only on the co-product & not on the main product? I was wanting to
know if we could have co-products set up for a main product, but ONLY produce some co-products, selectively,
by entering demand just for them.

Cheers

Like (0)

suhas shinde

December 15, 2017 at 11:28 am

Hello,

https://blogs.sap.com/2014/11/17/co-product-and-by-product-in-production-order/ 11/12
3/25/2020 Co-Product and By-product in Production order | SAP Blogs

Nice Document

Like (0)

Find us on

Privacy Terms of Use

Legal Disclosure Copyright

Trademark Cookie Preferences

Newsletter Support

https://blogs.sap.com/2014/11/17/co-product-and-by-product-in-production-order/ 12/12