All Member Open Forum

Greetings all,

We have a difference of opinion among our different storeroom teams on whether a new part and a refurbished part should share a SKU or have separate SKU.

I'd like to hear what you're doing in your company and regardless of which you've chosen one or the other, what were the primary drivers for the choice you made?

Additionally, if there were any alternatives or mitigations that you've implemented and would be willing to share, that would be useful as well. 

As an example:

Proposal 1 - 1 SKU and using 2 different bin locations to segregate the inventory along with physical tags.

Proposal 2 - Implement serialized MRO

Thanks.

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Glenn Simmonds, CMRP
Senior Manager - Corporate Machine Reliability
Sabert Corporation
www.sabert.com
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I think one SKU can work with different locations to specify both new and refurbished parts for ease of identification and application. Since the parts have the same description, one SKU is okay provided an additional identifier is included to differentiate between new and refurbished. Also, separate bin locations should be utilised. 

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Alaba Olayinka Onasanya
ExxonMobil
Victoria Island
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Hi Glenn,

I have also seen where part condition is tracked, where each condition state has its own SKU or suffix.  Based on the defined process for parts you can then enforce the workflow of allowed conditions for a given part.  This can also be implemented with serialized MRO if needed. 

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Luke Soltis
Mgr
Bearingpoint
Chicago IL
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hI

Since we need to follow up how long the refurbished component will last, we prefer to have separeted SKU, but utilizing the same Sku code and adding one " R " 

exemple : new one 1F32K

refurbished 1F32K-R

In a lot of circumstances we discover that a refurbished component will a higher cost per working hours that a new one > waste of money.

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Gilson dos Santos
Director
Curitiba
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Depending of the level of tracking you want, different options are available:

1 - Merge new and refurbished material under a single SKU using split valuation. Part retrieve from the store will have the average moving average price

2 - Assigned different valuation class to the SKU: New, refurbished, damaged, crash spare. More challenging to make sure proper valuation class is assigned on the good issue.

3 - Serialization will allow to track full history of the specific material but is a lot more demanding to maintain properly.

Do not recommend to use different SKU as it make maintaining BOM difficult. Trades and planners will also forget to search if a second SKU exist for the same item or two update both if some characteristics change  

Considering benefit vs effort, use more option 1 which allow to benefit from the lower cost of a refurbished material without the associated clerical burden. Option 3 to be considered for critical and expensive component only.

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Charles Henault
Senior Advisor – Asset Management
Riotinto
Montréal QC
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