Internal subcontracting for depot repair

When a defect occurs in a product, the customer requests for a repair and sends the product to the service department. The service department repairs the product, but a part of the repair is subcontracted to another repair center that belongs to another legal entity. Therefore an internal invoice is based on the actual material used, the actual hours booked, and the actual other costs such as transportation costs, is required to cover the repair costs incurred by the subcontracting repair center..

If a customer sends the product to a service department for repair, the service department creates a maintenance sales order using the Maintenance Sales Orders (tsmsc1100m000) session. Example The service department (in The Netherlands) receives an order from the customer to repair a defective product. The service department creates a maintenance sales order.

The service department must generate a work order for the repair center using the Work Orders (tswcs2100m000) session. The repair center must plan the repair activities and acquire the required material and/or tools. Example The service center generates a work order and assigns this work order to a repair center located at its own site.

The customer sends the defective product to the repair center. Example The customer sends the product to a repair center in Netherlands.

The defective product is received at the repair center.

The repair center repairs the product.If the product cannot be repaired at the current repair center, the repair work can be subcontracted to another repair center. A new repair order must be created for the product at the new repair center. Example At the repair center in the Netherlands, the first repair activity takes place. If the product cannot be repaired on this site, the repair order is created for another repair site in the United Kingdom and the product is send to this repair site for repair.

The product is transferred to the next repair center. Example The product is transferred from repair center, in Netherlands, and received at repair centre in United Kingdom.

The product must be repaired and all cost such as materials used, and hours spent must be captured in the work order. If Internal Invoicing is implemented, the cost must be available on the work order. Example The repair center in United Kingdom repairs the product and includes all the cost on the work order.

The service department invoices the customer, unless the product is repaired under the warranty or contract.

The internal invoicing can be based on the actual repair costs or a fixed repair price. For internal invoicing, the repair center must invoice the service department where the product is initially received. The internal invoice must be based on the Follow-up work order. The internal invoice must be created before the work order is closed using the Close Work Orders (tswcs2265m000) session. When the invoice is created, additional costs cannot be booked to the work order. The internal invoice is required for legal reporting and to support internal pricing. Example: The repair center in the United Kingdom invoices the service department (of the maintenance sales order) on time and material, based on the actual costs or based on a fixed repair rate. This internal invoice is created when all the costs (material, time and other costs) are booked on the work order and no changes are allowed resulting in all costs invoiced internally. For Internal Invoicing, thesePrice Methods can be used: