Normally refurbishment will be done for repairable materials (Spare part of equipment's). These materials will be split valuated.
Type of equipment is any equipment which will be repairable.
You use refurbishment when you have to repair equipments which are in stock and after repairing send them back to stock. The other case is when you have field service where the equipment is in the field and you have to repair it. The service engineer visits the equipment. You use normal maintenance order for field service.
In case of refurbishment material movements occur for the equipments and hence impact inventory.
Imagine you are servicing Airtel's radio towers. That is field service. On the contrary a laptop repair happens in your service center. And hence will reflect in your inventory.
Refurbishment Order is very much like other maintenance order except that it is always settled to a material instead of to a cost center.
During a breakdown, e.g. burning of motor of a machine, we normally creates a breakdown order, issues the motor from our store on the basis of this order & get the machine work. Meanwhile we will put back the burnt motor in our storage location which is nothing but a store for us. But now what is to be done with the burnt motor. Here we uses the refurbishment order, repair order for the motor. We creates a Maintenance order with order type PM04, issues the burnt motor for this order, maintains the components required for repairing this motor, we get the work done on the motor & confirms our order operation like other orders. Now we have to return this material to the store with upgraded valuation type i.e. from Damaged to Refurbished. So the cost here is not going to settle the cost center but to material resulting in increased value of motor.
The refurbishment of repairable spares is important for companies, for which system availability is a critical factor (for example, the process industry, oil producing and processing, steel processing) and for which repairable spares guarantee a high level of system availability. The refurbishment of - usually high value - faulty repairable spares is of considerable economic importance for these companies and is often a core process in Plant Maintenance. It is often much more cost-effective than a brand new purchase.
In production plants or other technical objects, high value components are often used (pumps, motors and so on) which are replaced in case of damage by a functional repairable spare and then refurbished using a separate order.
In addition to the functions for Plant Maintenance, functions from inventory management and materials planning are also used for the refurbishment of repairable spares.
No distinction is made between "good parts" (functional parts) and "bad parts" (non-functional parts) in materials planning.
To used it:
A material master record must be created in the system for the repairable spares.
Unique identification is only possible if the individual pieces of material have been serialized.
It is advisable to use the Customizing function in your system to define an internal order type, which you indicate for refurbishment. However, you can also use an existing order type for the refurbishment.
