Remanufactured or Refurbished Item

Remanufactured or refurbished items are customer returns, lease returns, or pre-owned equipment that are rebuilt and sold as refurbished products. These items are processed as used inventory and refurbished through repair, component replacement, or maintenance.

On the Service Orders form, a Service Request Order (SRO) must be created with only one order line, to refurbish an item. The Refurbish check box must be selected to indicate that the SRO is for refurbishment. By default, these field values are updated on the refurbish SRO:

  • The Billing Type field value is set to Calculated/Time and Material.
  • The Billing Status field value is set to Not Billed.
  • The Billing Code field value is set to No Charge.
  • The Accumulate WIP check box is selected.

After defining the SRO line and operation, the SRO transaction must be posted with the required materials, components, miscellaneous items, and labor. A Line Return to Stock transaction must be created to return the refurbished item to inventory.

After refurbishing the item:

  • The Line Return to Stock transaction must be posted.

    Note: This transaction cannot be unposted.
  • The SRO must be closed without invoicing, because these SROs are created for internal customers and are not billed.

The cost of the refurbished item includes all refurbishing costs, such as materials, components, miscellaneous items, and labor. These costs are stored in WIP accounts, and the prices are set to zero on the transactions.

Example calculation:

  • Cost of an item before refurbishment: 950
  • Cost of component A used in refurbishing: 35
  • Cost of component B used in refurbishing: 50
  • Cost of miscellaneous items used in refurbishing: 63
  • Cost of labor (3 hours at 18 per hour) involved in refurbishing: 3 * 18 = 54
  • Total Cost of the refurbished item: 950 + 35 + 50 + 63 + 54 = 1152

When Service Management is integrated with Distribution SX.e, the refurbish items are handled differently. A sales order is created for an SRO and is set to the Ordered stage, after the SRO transactions are posted. The sales order includes separate lines for materials, components, miscellaneous items, and labor from the SRO transactions. A return order line is created for the Line Return to Stock transaction, with a quantity of -1.

Note: The Reason Code field value is set to ISM Refurbish, for the return order line, only if the Line Return To Stock Reason field value is set to ISM Refurbish, on the SA Administrator Options - Integrations - Service Management screen.

In the Ordered stage, the shipped quantity for all order lines (except the return line) is updated to match the ordered quantity. The shipped quantity for the return line remains zero.

When the SRO is closed, the sales order is updated to the Shipped stage, and a back order is created with the suffix -01. The back order is set to the Shipped stage. The back order includes the return order line with a shipped quantity of -1. The price of each order line remains zero, because the sales order and the back order are not billed for refurbishment. Unposted transactions from the SRO are added as back order lines and closed as Lost Business orders.

When the OE Entry Processing Invoice Processing report is generated:

  • The sales and back orders are moved to the Paid stage.
  • An invoice journal is created and linked to the orders. The credits and debits details of the journal can be viewed on the Invoice Journal screen.
  • The average cost of the product is updated with the cost of the refurbished item. The updated average cost can be viewed on the Warehouse Product Setup screen.

Refurbished and new items are usually maintained separately in inventory to distinguish average costs.

For sales orders with serialized items, these actions must be manually performed:

  • Assign the serial number
  • Ship the order
  • Invoice the order
  • Assign the refurbished serial item to the back order
  • Ship the back order to return the inventory