Process Scrap, Spoilage, and Rework Orders

1. Overview & Business Value#

This comprehensive operational guide details the architecture, business workflows, configuration parameters, and execution steps for Process Scrap, Spoilage, and Rework Orders within SmartERP.

Recording manufacturing waste, scrap accounting, normal vs abnormal spoilage, and rework MO execution.

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2. Prerequisites & Security Access Groups#

• Required Modules: mrp, quality_control, smarterp_manufacturing_costing
• Security Groups:
  • Manufacturing User (Technical ID: mrp.group_mrp_user)
  • Manufacturing Administrator (Technical ID: mrp.group_mrp_manager)
  • Quality Inspector (Technical ID: quality.group_quality_user)
• Master Data Dependencies: Bills of Materials (BoM), routing operations, work centers with machine/labor hourly rates, raw material stock, and inspection checkpoints.

3. Step-by-Step Configuration & Execution#

Step 1: Navigating to the Module Interface#

1. Log into your SmartERP instance at https://smarterp.et/odoo.
2. Open the main App Switcher (grid icon in the top-left corner).
3. Select the Manufacturing app icon.
4. From the top navigation bar, open Manufacturing → Operations → Manufacturing Orders / Work Orders; Quality → Quality Control.

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Step 2: Creating and Parameterizing Records#

1. Click the New button in the top-left control panel.
2. Complete the mandatory fields in the record form:
   • Finished Product (Mandatory): Manufacturable item variant linked to an active Bill of Materials
   • Quantity to Produce (Mandatory): Target production batch volume in standard unit of measure
   • Bill of Materials (BoM) (Mandatory): Active engineering recipe defining component roll-ups and operation steps
   • Scheduled Date (Mandatory): Target production execution date and shift allocation
3. Configure optional operational parameters and localized tags as required:
   • Work Center Routing (Optional): Specific shop floor machine or assembly station sequence
   • Lot / Serial Number (Optional): Assigned traceability lot for finished goods batch tracking
   • Analytic Cost Account (Optional): Cost absorption center for direct labor and utility overhead
4. Click the Save icon in the control bar to commit the record.

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Step 3: Validating and Processing Transactions#

• State Transitions: Execute operational state progression (Draft → Confirmed → In Production → Quality Gate Passed → Done → Cost Closed).
• Ledger & System Impact: Consumes raw materials from inventory (crediting stock valuation), absorbs labor/machine overhead, and debits finished goods inventory at actual cost.
• Audit Verification: Automated recording of author ID, timestamp, and immutable revision history.

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Normal vs Abnormal Spoilage in Ethiopian Taxation#

Under Ethiopian Proclamation 979/2016 (Federal Income Tax Proclamation):

• Normal Spoilage: Inherent manufacturing loss within standard industry benchmarks. It is absorbed directly into the product unit cost and accepted as deductible Cost of Goods Sold (COGS).
• Abnormal Spoilage: Unexpected waste resulting from equipment malfunction or negligence. It must be isolated and expensed to a separate loss account (Loss on Abnormal Scrap - Account 604100).

Procedure: Recording a Scrap Order#

1. Open the active Manufacturing Order.
2. Click Scrap in the header.
3. Select the scrapped item (e.g., Steel Sheet Roll 2.5mm).
4. Enter the Quantity (e.g., 12.5 kg).
5. Select Scrap Location (Virtual Locations / Scrap).
6. Click Validate. SmartERP generates the inventory move and posts the cost difference.

Procedure: Creating a Rework Manufacturing Order#

When defective items can be salvaged:

1. Create a new MO for the finished product.
2. Under components, add the defective items (e.g., Off-Spec Pipe 2-inch) plus required salvage consumables (e.g., Re-threading compound).
3. Select a specialized Rework BoM that excludes raw material cost and only charges incremental labor and machine time.

4. Advanced Configuration Points#

• Automated Actions & Scheduled Tasks (Crons):
  • MRP: Recalculate BoM standard costs (mrp.ir_cron_bom_cost_roll): Runs weekly to update standard costing from latest procurement purchase prices
  • Quality: Trigger periodic inspection alerts (quality.ir_cron_inspection_check): Runs daily to flag mandatory quality testing queues
  • Workcenter: Update OEE statistics (mrp.ir_cron_workcenter_oee): Runs hourly to compute Overall Equipment Effectiveness metrics
• Custom Print Templates & Reports:
  • Production Order Traveler & Pick List
  • Shop Floor Work Order Execution Slip
  • Quality Inspection Certificate & Non-Conformance Report
  • Manufacturing Cost Analysis & Variance Ledger
• Multi-Company Rules: Record-level security isolation under Company 1 (Ashewa Technology Solutions S.C.), preventing cross-company ledger leakage across parent and subsidiary legal entities.

5. Comprehensive Troubleshooting Matrix#