RMA on a Component of an Assembly

Hi All,

Our company manufactures centrifugal pumps. We sometimes have to have a part of the pump returned such as say the impeller. The impeller is a serialized component that may be repaired and returned or it may be scrapped and replaced. Does anyone have a process for this?
Keep in mind we would want to return the serialized impeller that was used on the pump on the RMA.
Is this possible or do we need to go about this a different way?

Knowing nothing more than what you said, I’d probably RMA the entire pump (the part number that was on the original SO, whether they returned the entire unit or just a portion of it), and then create a re-work job within DMR with the ability to either repair the failing piece or scrap it and issue a new piece. This keeps everything linked in the system, and the notes in various places would reflect exactly what parts came back and were reshipped.

Depends a LOT on what kind of record-keeping you need.

2 Likes

Ernie, the problem I see with that is that the RMA causes the Cost of the entire pump to go to the Cost of Sales Returns account which if the impeller is the only thing being returned, would be inaccurate.

Davis,

The problem is that I don’t see a good solution to the problem.

Assuming that the impeller is going to get shipped out at some cost (repair or replacement), you would need a new sales order or a new line to an existing sales order.

Next place the serialized part back into inventory. Depending on the costing method, you may have to tweek the inventory cost. Lot costing would be great.

IF QA is available,

  • Create an inventory DMR (non-conformance) and move the serialized part into inspection. Upon inspection you can then fail it or pass it. If you fail it, you can then issue it to a
    rework job or scrap it.

  • If scrapping it and shipping a new one to the customer, ship it against the sales order line created.

  • If repairing it, create a rework job and settle the non-conformance by transferring the part to the job.

  • Once repaired, ship the job to the customer.

  • The costs for the part are recorded more accurately.

IF QA is not available,

  • Determine if the part is to be scrapped or reworked. If reworked, create a rework job and issue the part from inventory to the job.

  • Ship the part (new or reworked) to the customer from inventory or the job.

That’s the only thing I can think of.

Charlie,

A few questions on this. What do you mean by QA? Quality Assurance? Also when you say Place the serialized part back into inventory how would I go about doing this when it was consumed as a material on the pump that was shipped to the customer?

Thank you for your input.

You could do an inventory adjustment and pick the serial number to add it back into inventory. Have a reason code of RMA or Customer return. That action should be able put the part back into inventory.

Charlie Smith

CRS Consulting Svcs

(860) 919-1708

CTCharlie@outlook.com

At the time you dispose the unit to your repair job, you can change to cost to zero. I think this will fix that issue. If not, I seem to recall that we would add an -R to the end of the part and have the RMA reference that instead of the actual part number. The cost would be zero at return. Then we’d dispose the unit to a job. Issue the impeller to the job. The cogs will consist of that part and any labor you have added. Alter the sales account by changing the Product Group and your repair sales and cogs should be correct.

But Mark, now you are creating a part ID (and new serial number) you probably would not need. Since the impeller already has a part ID and serial number, adjusting the part back into inventory would give you the visibility on the serial
tracker and not confuse the issue with a new part ID. I don’t know if the part is lot tracked (which for a part like that would probably be a good idea), the cost of the lot could be adjusted as well.

Charlie Smith

(860) 919-1708

CTCharlie@outlook.com

Actually, those companies found the new part number a feature and not a bug. Sometimes the customer decided not to fix the units and they were fixed and later sold as refurbs. A new part number made it easier to apply a reduced price, different costs, and differentiate it from a new unit in inventory.

These companies also used the same serial number on the new part (they used one SN Mask for all parts) so Serial Number tracker showed the entire history of that unit when new or repaired.

I will try a few of these scenarios today, but adjusting may be the best option for us. Also these parts are not lot costed they are FIFO costed. We also don’t really want to make a new part number for these because if they are refurbed then we would want to sell it as the original part.

Charlie,
In the scenario where you makes a sales order for the impeller part and adjust it into inventory you will never make an RMA correct?

I guess it depends on your business process.

If you issue an RMA, you have to dispose of it by Returning it to stock, scrapping it or reworking it. Whether you are planning on issuing a RMA Credit Memo. But the big question is what are you RMAing? You are not RMAing the whole pump,
just the impeller. So in that case an RMA does not make sense, If you were taking in the whole pump, yes.

If you sold the impeller separately from the pump and it was on a sales order, yes.

Unless it’s on a sales order, no. in that case there is nothing to RMA as such.

Charlie Smith

CRS Consulting Svcs

(860) 919-1708

CTCharlie@outlook.com

Charlie,
I am currently trying to adjust the impeller back into inventory, but I do not know how to get the serial number on the adjustment since that serial number was consumed in the job to make the pump.

Doesn’t the serial number button become available when you enter the part ID?

Charlie,

Yes it becomes available, but the serial number was already used so it wont be able to used again. It doesnt let me retrieve available only create new.