Quarantine inventory

You can put rejected goods in a quarantine warehouse or a quarantine location to determine their disposition, such as scrap, use-as-is, rework, or return to vendor.

Quarantine handling is also available for items rejected after inventory inspection. Quarantine handling is performed in the warehouse in which these items are stored. If the item and the warehouse is location controlled, the inventory is automatically moved to the designated quarantine location. See Inventory inspections for information about inventory inspections.

Process flows to quarantine

Inventory is put into quarantine if initially rejected during:

• Production upon completion of an operation, when specifying Move Rejected End Item to Quarantine.

• Inbound inspection upon receipt of:

  • Manufactured end items
  • Purchased items
  • Sold items on sales return orders
  • Enterprise Planning distribution orders

• Outbound inspection upon issue of:

  • Materials to production. The outbound order lines are based on the production order for which the issue is initialized. The materials are rejected during outbound inspection and sent to quarantine.
  • Items to be sold. The end items are rejected during outbound inspection and sent to quarantine.
  • Enterprise Planning distribution orders

• Transfers between warehouses during:

  • Issue
  • Receipt

Quarantine inventory records

When inventory is quarantined, LN creates a quarantine ID or adds the inventory to an existing quarantine ID. You cannot manually create quarantine IDs. A quarantine inventory record consists of a header and one or more disposition lines. LN creates a disposition line for each rejected stock point.

When sent to quarantine, rejected inventory is added to an existing quarantine ID if the following data match:

• Warehouse
• Item
• Order origin
• Order
• Order set
• Order line
• Order sequence
• Operation
• Inspection
• Inspection Sequence

Items rejected during a production operation are sent to quarantine without undergoing a warehouse inspection, therefore the inspection fields from the previous list are not used for these items.

If these data do not match, LN creates a new quarantine ID.

A quarantine ID corresponds with a warehousing inbound or outbound inspection or a warehousing inbound order line originating from a production order. A quarantine ID can also correspond with an inventory inspection or one or more non-conformance material reports (NCMR). The NCMR also includes the originating order and if applicable, the inspection.

To handle quarantine inventory

Handling quarantine inventory entails specifying a disposition, a reason code and other data as needed, and selecting the Process option for a quarantine ID or for the selected disposition line or lines. You can also perform a disposition for a part of a disposition line.

Depending on the selected disposition, LN then generates a disposition order, receipt procedure, or inbound advice that is used to process the selected items.

Disposition	Disposition order/result	Description
Use As Is	Receipt procedure	LN creates a receipt into the warehouse. The receipt is automatically confirmed and put away. If locations apply, inbound advice is created after the receipt is confirmed. This applies if the quarantine inventory originates from purchase orders or purchase schedules and the payable-to-supplier setting is not activated.
	Inbound advice	LN creates inbound advice to a pick or bulk location without a receipt procedure. If no locations apply, the items are unblocked in inventory. This applies to items originating from purchase orders or purchase schedules for which the payable to supplier method is activated and to items from all other origins, including inventory inspections, regardless of the payable-to-supplier setting.
	No move	The inventory is available again without having to be moved. This applies to items originating from inventory inspections, which are stored in warehouses without locations. For these items, quarantine handling is performed in the storage warehouse.
No Fault Found	The same as Use As Is	The same as Use As Is
Scrap	Adjustment order	Removes the items from the inventory.
Return to Vendor	Purchase return order	Returns the items to the supplier.
Rework (to Existing Specification)	Production order	Issues the items to the work center that rejected the items.
Rework (to New Specification)	Production order	The user specifies a new ID code for the items. The order returns the items to the work center that rejected the original items.
Reclassify	Item transfer order	The user specifies a new ID code for the items. The order stores the new target item in the same warehouse. If locations apply, you can specify a pick or bulk location.

If the activities of the inbound or outbound procedure of the generated disposition order or receipt procedure are set up as automatic, these steps are executed automatically after processing the quarantine inventory. Otherwise, manual steps may be needed to complete the inbound or outbound procedure of the selected disposition option.

Payable to supplier

For items rejected in inbound inspections, payable-to-supplier allows invoicing and payment of the entire received quantity before the warehousing inspection and quarantine processes are completed. This avoids risking late payments to the supplier due to time-consuming disposition procedures. Settlements for scrapped, destroyed, or returned goods can take place after quarantine processing.

For purchased quarantined items originating from purchase orders or purchase schedules, the rework options and the reclassify option are unavailable if payable-to-supplier is not activated. This is because if the Payable to Supplier check box is cleared, the supplier owns the rejected items and the rejected goods will not be paid, whereas rework or reclassification is only allowed if the supplier is paid.

Setup

To use quarantine handling, you must activate this functionality for the relevant items and warehouses. Defining default order series and order types for disposition orders enhances quarantine handling.

If your warehouses are location-controlled, you must define quarantine locations. You can define a specific default quarantine warehouse for items that are rejected and moved to quarantine.

To optimize inventory planning, you must specify the availability of inventory in quarantine for planning using Enterprise Planning, TPOP, or SIC.