Once you have created the Production By-Products that your business requires, you are able to assign the "Production By-Product" to Items and/or Stockkeeping Units as required. 

To do this, a new attribute has been made available on the Item and Stockkeeping Unit (SKU) screens, called Production By-Products No., which is found on the Replenishment FastTab, as shown below.

Having the ability to define the Production By-Product No. at both the Item and SKU means that you can define a different set of By-Product Items for Variants and/or different Locations, where different manufacturing processes may alter the potential Items that can be Output as By-Products. 

At the point that the Item (or SKU) is used on a Production Order, the system will copy across the Items from the By-Product (or By-Product Version) setup, in readiness for Output to be processed against the Production Order.

Note: For a "Production By-Product" to be assigned to the Production Order, the Status must be Certified.