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SAP Engineering Change Obsolescence Exposure Calculator: Stock, WIP and Open POs at Risk

Before an engineering change is released, someone has to answer a simple question: what do we lose if the old component stops being used today? This calculator turns stock, WIP and open order quantities into a net loss estimate and a run-out time.

Your numbers

units
units
units
$
35 %
%
%
%
units/week

Your results

Estimated net loss
$54,013
Weeks to consume stock and WIP
11.1 weeks
Candidate for a run-out effectivity instead of an immediate cut-in.
Quantity on hand and in WIP
5,000
Gross inventory exposure
$116,000
Recovered value
$25,012
PO cancellation cost
$6,525

Planning model. Accounting treatment of write-downs, scrap and supplier settlements depends on your policies and local rules.

Save results:

Net loss vs share reworked or reused

Sweeps Quantity that can be reworked or used elsewhere from 0 to 100, holding your other inputs fixed.

Change impact from live data

Optional help pulling stock, WIP and order quantities for the parts in your next engineering change.

Optional. The tool and every export work without this. No spam.

How to use the calculator

Take stock on hand from MMBE, WIP from your production orders and open quantities from the purchase order list. Enter the unit cost and estimate what share can be reworked or consumed in other products. Rework has a cost and the remainder has a salvage value, which may be zero. Add a cancellation charge for open purchase orders from supplier terms.

  • Use plant level quantities, not company totals
  • Check consignment and vendor owned stock separately
  • Enter a conservative salvage value

The method

Recovered value equals the reworked share times unit cost net of rework cost, plus the remaining share times salvage. Net loss is the book value of stock and WIP minus recovered value, plus the cost of cancelling open orders. Weeks to consume divides on-hand quantity by weekly consumption, and tells you whether a run-out date is realistic instead of an immediate cut-in.

Using the result in an ECN

In SAP an engineering change number controls a date effectivity, so you can often pick the date at which the old component stops being used. If weeks to consume is short, set the effectivity to match and avoid the loss. If the part is safety critical or a regulatory change forces a hard date, the net loss is the cost of that decision and belongs in the approval record.

Common mistakes

Forgetting subassemblies and finished goods that contain the old part is the most common error. Others include ignoring supplier cancellation windows, forgetting field stock held by distributors, and double counting open orders already reflected in expected receipts.

  • Missing parts embedded in stocked subassemblies
  • Ignoring supplier lead time that makes cancellation free
  • Using standard cost when actual cost differs

Frequently Asked Questions

Is this an accounting write-off calculator?

No. It estimates economic exposure to support the change decision. Accounting for inventory write-downs follows your policies and the applicable reporting standard, so confirm treatment with finance.

How do I handle a phase-in rather than a hard cut?

Use the weeks to consume figure to choose an effectivity date that lets the old component run out. The loss then falls close to the open purchase order cost only.

Does this cover finished goods?

Add the quantity of old component embedded in finished goods that cannot be reworked to the WIP field. Customer shipped units usually need a separate service decision.

What if the old part can return to the supplier?

Model it by raising the salvage percentage to the credit you expect, net of restocking fees. Treat it as an assumption until the supplier confirms in writing.

Netray can help extract stock, WIP and open order quantities for every affected part of a change, so the exposure is calculated from live data instead of spreadsheets.

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