A material of value produced as a residual of or incidental to the production process is called a by-product. Ratio of by-product to primary product is usually predictable. By-products can be recycled, sold as-is, or can be used for other purposes. For example, when producing steel screws in a turning process scrap metal particles will also be generated. This scrap metal can be considered as a by-product of steel screw manufacturing process as long as they can be sold as-is, recycled or used for other purposes.
In Product Structure window By-products tab, it is possible to define possible by-product supplies from the manufacturing process. By selecting Use as Supply in MRP check box for the given by-product, it is possible to define it as a supply to be used in MRP. Furthermore, by selecting Use as Supply in MRP check box, MRP will use that by-product supply for future demands comes for the part which was defined as a by-product.
After creating the shop order from the shop order requisition (created for the parent part by MRP), by selecting or unselecting the Use as Supply in MRP check box planner has the option to consider using the by-product supply from the shop order in the next MRP run. By default the Use as Supply in MRP check box is getting the checked status from the parent shop order requisition.
Note : Use as Supply in MRP check box cannot be selected in the Product Structure window By-products tab if this part has a structure and the parent part is already defined as a by-product at a lower level. For example, in the structure of Part A , Part B is defined as a by-product and in the structure of the Part B, Part A defined as a by-product, and therefore it is not possible to check the Use as Supply in MRP check box in such a situation. This can be sorted out in a way such that once the shop order is created for the parent part (in the example for part A) planner can select Use as Supply in MRP check box in the Product Structure window By-products tab for the by-product (in the example part B ) so that in the next MRP run it will be considered as a supply. Here, planner should carefully create shop orders and should select or not Use as Supply in MRP option to have a good use of by-products being manufactured during the manufacturing process.