Managing Broken Items

Overview

This document will cover what to do when you’ve received an or have broken material in the warehouse. Broken material could come from a customer’s return, received on a PO or it was broken in the bin location and it wasn’t realized until the item was picked.

Receiving Broken Material

Whether we like it or not, materials sometimes are received damaged. This damage could be caused during transit, or the Vendor sent faulty material, regardless of the scenario there is a process to handle this.

Purchasing Orders

When Receiving receives a PO, they will locate the open receiver by going to Inventory > Warehouse Manager > Receivers, to enter or search for the PO.

Once the PO is found, double-click on the line to open the Receiver.

Now, since some items are broken and some are not, manually input the quantity of total received items in the “Qty Received” field and manually enter the quantity of broken items in the “Qty Broken” field.

Example, you receive qty 12 of 3M13, however, 6 are good and 6 are broken, you will put 12 in the “Qty Received” field 5 in the “Qty Broken” field and 6 in the quantity put away field.

Once you’ve finished receiving, post the receiver to ‘Received’ and ‘Put Away’

The receiver is now marked Payable. At this point, the good items will be moved in the software into their default bin locations AND the broken material will be added to the “Suspect On Hand Bin” to be handled later.

Customer Returns

When a customer returns broken material an RMA will need to be processed first. To create an RMA, go to New > Return Request / RMA

Enter the customer’s information and the item(s) that are being returned.

After you have entered the item number and quantity, you will now go to the Status and Location tab within the grid.

Now depending on your settings these may already be defaulted, however since you know these items are truly broken you will select the status from Unknown to Bad, next choose the location within your warehouse where you will place bad items to wait and see if the vendor will need them returned or trashed. Typically this will be the Suspect On Hand Bin. NOTE: If you are picking up or if the customer is shipping the broken material back you can keep the status to Unknown until you can further inspect the item.

Once the return is completed .

Picking Broken Material

There are a couple of scenarios that you may encounter when picking material for an order and it is broken.

First scenario, if you have enough stock to cover the order you're picking, but want to remove the broken stock from the location and place it into the suspect on hand bin for additional instructions. Go to Inventory > Warehouse Manager > Location Management

Select ‘Find Item’ or press Ctrl + F to bring up the Inventory lookup screen and search for your part number to locate its location.

Once you find the item it will appear in the Items in the “” Bin section.

Highlight the item and drag it into the Suspect On Hand Bin, under the Holding Bins section.

You will get the option to Transfer On Hand to Bin select this once selected you will get the following prompt.

In my example, out of the 12 items available, 6 were found broken so I am going to transfer 6 to the Suspect On Hand Bin. Now when you view what items are in the suspect on hand bin you will now see the quantity of the item you transferred.

Handling the Broken Material

Go to Inventory > Warehouse Manager > Manage Suspect On Hand > Manage Broken Items Here, you can see a list of everything that is in the Suspect On Hand Bin.

Vendor Returns

If you would like to return an item to a vendor, you will first need to select the Vendor to return to. When you are searching for a vendor, the default vendors that are displayed are all the vendors related to this item's manufacturer (which is determined in Purchasing > Manufacturer/Vendor Relations). Then you will need to specify a quantity and the location to put it in your warehouse before it is returned (such as the ReturnToVendorBin location).

When you hit the Process button, an unconverted Return To Vendor is created in the system with the items on it. You will need to find the RTV and convert it to finish the RTV process. You can find additional information regarding this in the RTV Core Process document

Vendor Credits

In the scenario that the vendor doesn’t want the material back and prefers to just give you a credit, go to the Vendor Credit column and select the ‘...’ and enter the quantity of items that the Vendor will credit you for. Based on the cost of the item at the time of purchasing the item, the vendor credit amount will also be shown.

Once you process the Vendor Credit the Accounting AP process will take over. To view those processes in detail please refer to the following two documents for more information. Accounts Payable - Core Process Doc

& Enter a Bill Against Short Shipment - Process Doc

Write Offs

The last option you have is to write the item. In the Trash section, you would select a quantity and then click the "..." in the Accounting section. This will bring up the window seen below. This will allow you to mark the item as a credit or a write-off. If you write the item off, your expense ledger account will be updated.

Otherwise, your customer will be credited for this item.

In the scenario that you are going to write off and trash an item, you may need to do a stock adjustment to remove the quantity from the stock you have on hand.

To do a stock adjustment Go to Inventory>Inventory Manager>Item Manager

Search or enter your item number. When you locate the item, double-click on it.

While in the item Manager select the ‘Warehouse’ tab.

In the bottom left corner select ‘Stock Adjust’

While in the stock adjustment screen subtract the quantity that you are writing off in the field under the ‘New’ column. Next, in the ‘Info’ section you can write a comment, but you do need to choose a reason from the drop-down for the stock adjustment.

Finally, save your changes and your stock will now be adjusted to the correct quantity.

Once you are done, check each item that you would like to process, and then click the Process button on the bottom right. You will then be notified that the items have been processed successfully, and the items that were processed will be highlighted in yellow. Once you search again, these items will disappear (assuming that the Show Processed filter is unchecked).