Background: Rejected Material Disposition

Use Rejected Material Disposition (MRB) program to disposition (e.g., return, rework, scrap) goods that have been assigned an MRB tag. This program is available if you selected Material review board active? in System Options Maintenance - Purchasing Options. See Road Map for work flow.

This topic has these subtopics:

MRB Tags

Units of Measure

Disposition Codes

Material History

Vendor Disposition Codes

Audit Trail

MRB Tags

An MRB tag is created when:

Disposition Codes

Disposition codes indicate what to do with a rejected item: stock as is, scrap, return to the vendor, rework/repair a manufactured item, or salvage the components of a manufactured item. You can assign more than one disposition code to the quantity rejected on a single MRB tag.

If you selected the Inventory interfaced to GL? option in the System Options Maintenance (XM) program Inventory Control Options, the Rejected Material Disposition Register (VBJ) program posts to the accounts or criteria for the posting names set up in the Posting Criteria Maintenance (XPC) program.

These codes apply to purchased, manufactured, and transferred items.

If the rejected item is

Select

Effect

Usable

1: Stock as is

Puts the item or component into inventory.

If inventory is interfaced to the general ledger, the system posts to the accounts or posting criteria set up for these posting names:

Debit

Credit

INVENTORY

MRB

If a purchase service (labor), updates the work in process operation:

Debit

Credit

WIP OS

MRB

Unusable

2: Scrap

Scraps the component or item.

When a serialized item is scrapped, the serial number is "morgued" so that it cannot be used again for that item number (see Morgue a Serial Number).

If inventory is interfaced to the general ledger, the system posts to the accounts or posting criteria set up for these posting names:

Debit

Credit

INV SCRAP

MRB

 

Purchase Orders

This disposition code applies these effects to a rejected purchased item.

If you want to

Select

Effect

Return the item to the vendor, have the vendor replace or fix the item, and/or return your money.

3: Vendor disposition

You must also select a vendor disposition code that define the actions for the reject item. See Vendor Disposition Codes.

Manufacturing Orders

These disposition codes affect a rejected parent item on a manufacturing order:

If the rejected item

Select

Effect

Can be made usable with rework / repair

4: Mfg rework / repair order

Creates a rework manufacturing order.

If inventory is interfaced to the general ledger, the system posts to the accounts or posting criteria set up for these posting names:

Debit

Credit

WIP
MFG VAR

MRB

Cannot be used but some of its components can be

5: Salvage components

Returns selected components to inventory and scrap unselected components.

If inventory is interfaced to the general ledger, the system posts to the accounts or posting criteria set up for these posting names:

Debit

Credit

INVENTORY
INV SCRAP

MRB

Return Material Authorization

These disposition codes effect a rejected parent item on material returned by a customer on an RMA:

If the rejected item

Select

Effect

Usable

1: Stock as is

Puts the item or component into inventory.

If a labor PO, the stock/use as is disposition updates the routing sequence for the manufacturing order and increments the quantity complete for the operation.

If inventory is interfaced to the general ledger, the system posts to the accounts or posting criteria set up for these posting names:

Debit

Credit

INVENTORY

MRB

If a purchase service (labor), updates the work in process operation:

Debit

Credit

WIP OS

MRB

Can be made usable with rework

4: Mfg rework / repair order

Creates a rework manufacturing order.

If inventory is interfaced to the general ledger, the system posts to the accounts or posting criteria set up for these posting names:

Debit

Credit

WIP
MFG VAR

MRB

Unusable

2: Scrap

Scraps the component or item.

If inventory is interfaced to the general ledger, the system posts to the accounts or posting criteria set up for these posting names:

Debit

Credit

INV SCRAP

MRB

Cannot be used but some of its components can be

5: Salvage components

  

Vendor Disposition Codes

If you selected disposition code 3 Vendor disposition for a rejected purchased item, you must also select a Vendor disposition code. The system manages the inventory and credits differently depending on the vendor disposition code you choose.

If you selected the Inventory interfaced to GL? option in System Options Maintenance (XM) Inventory Control Options, the Rejected Material Disposition Register (VBJ) does not post any transactions to GL for a return to the vendor. It is assumed that the invoice for the original PO/receiver will be entered in AP Invoice Entry (NE), as it is still considered an open payable, and the credit memo created by MRB will then offset the accounts payable account and MRB inventory.

If

Select

System actions

Both you and the vendor agree that the rejected item cannot be used.

C: No return to vendor; credit due

  • No inventory transaction.

  • Creates a credit memo in an MRBCREDIT batch in the AP Invoice Entry (NE) program.

The rejected item does not meet your quality standard. You do not want it.

D: Return to vendor; credit due

  • Stocks the rejected item and immediately creates a shipment to the vendor.

  • If it is a labor PO, a shipment is created, but there is no inventory impact.

  • Creates a credit memo in a RETPURCH batch in the AP Invoice Entry (NE) program and a shipment for returning the goods to the vendor.

You want the vendor to replace the rejected item, to credit you for it, and to send you an invoice for the replacement.

E: Return to vendor for replacement; credit due

  • Stocks the rejected item and immediately creates a shipment to the vendor. (If a labor PO, there is no update of inventory, but a shipment to the vendor is created.)

  • If you selected Create separate replacement PO? (in System Options Maintenance - Purchasing Options), a new purchase order for the returned item is also created.

  • Creates a credit memo in a RETPURCH batch in the AP Invoice Entry (NE) program. Uses the PO unit cost, except for a consignment item, which is standard unit cost.

Units of Measure

For purchase order items, the quantity received, to be inspected, and rejected are in purchasing units of measure. When the program moves the items to stock, it converts the quantity from purchasing units to stocking units. For example, if you bought one package of belts, each package has twelve belts, and you stock the belts by each, the program adds twelve to stock. For manufactured items or transfers, the quantity received, to be inspected, and rejected are in the stocking unit of measure.

Material History

The Material History (MH) file is updated with disposition actions as follows:

  • Scrap does not write another MH transaction

  • Stock as is writes an MH transaction with the MRB tag reference as the demand order

  • Mfg rework/repair order writes two transactions:

    • one to re-stock with the manufacturing order specified on the MRB tag as the demand order reference

    • one to pick with the rework/repair order as the demand order reference

  • Vendor disposition + No return to vendor does not write another MH transaction

  • Vendor disposition + Return to vendor (two possible types) writes two MH transactions:

    • one to re-stock with the referenced PO as the demand order

    • one to pick with returned PO as the demand order

Audit Trail

To activate an audit trail, select one of the files listed below in the Audit Trail Maintenance (XAT) program. The system records all transactions. You can then run the Audit Trails (ATR) program and select that file to print a report of these transactions.

  • MP2: Mfg Order Master

  • MP9: Mfg Order Components

  • MRBD: MRB Detail

  • VP1: PO Header

  • VP1B: PO Lines

  • VP1BD: PO Line Detail

  • VR1: Receiver Header

  • VR1B: Receiver Lines

  • VR1BD: Receiver Line Detail

  • WIPF: Work-in-process Header