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Disassemble Assemblies

Business Example

You are a custom bicycle manufacturer that has received a cancellation for a custom bike you have recently completed. You have decided to disassemble this bike into its major components so that you can reuse these components on future custom orders. Use a non-standard discrete job to disassemble the bike.

Assumptions

You have one completed custom bicycle in a nettable finished goods (FGI) subinventory. Your manufacturing engineers have set up a standard operation to disassemble bicycles, called Disassembly, with a single direct charge resource, called Tech1.

Setup

Use the Discrete Jobs window to define a non-standard discrete job for the bicycle assembly with a job quantity of 1. Since you will not be receiving any finished bicycles as a supply, enter zero in the MRP Net Quantity field rather than the job quantity. Select an expense type non-standard accounting class since you are not building up WIP assets. Use a class with accounts that correspond to the appropriate expense accruals.

Use the Operations window to manually create a single operation routing with the Disassembly standard operation as the only operation.

Use the Material Requirements window to manually create the component requirements. The first requirement must be the bicycle assembly itself at the Disassembly operation. Enter Push as the supply Type since you will likely push the bicycle assembly to the Disassembly operation and enter the FGI subinventory in the Supply Subinventory field. Check MRP Net since you want to create demand for a bicycle that is supplied from the nettable FGI subinventory.

Further, you must create negative component requirements for each of the major components you expect to return to inventory from the bicycle including the frame, seat, handlebars, crank set, wheels, and tires. For these components, check MRP Net so that the MRP planning process sees these negative demands as supply.

Print the Discrete Job Pick List Report and release the job using the Discrete Jobs window.

Transactions

Use the WIP Material Transactions window to issue the bicycle to the non-standard discrete job.

Use the Resource Transactions window to charge resource time incurred during the dismantling process.

Use the WIP Material Transactions window to return the frame, seat, wheels, and so on to inventory as you dismantle the bicycle. These return transactions fill the negative requirements you created using the Update Requirements window. Do not use the Completion Transactions window since there is nothing to complete.

Costing

When the disassembly process is over and all the components have been returned to inventory, you must change the job status to Cancelled-no charges. The cost accountants can run a Discrete Job Value Report to check all the charges.

The job must have an ending balance equal to the resource and overhead costs incurred during assembly and disassembly and any outside processing costs incurred during assembly. The costs of materials issued and returned must be equal since all the components of the bicycle were returned to inventory. The resource, overhead, and outside processing costs are written off as a variance when you close the job or at period end when expense type non-standard jobs are automatically expensed.

See Also

Defining Discrete Jobs Manually

Adding and Updating Material Requirements

Adding and Updating Operations

Charging Resources Manually

Issuing and Returning All Push Components

Performing Move Transactions

Completing and Returning Assemblies

Overview of Discrete Job Close

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