Reverse Logistics (breakdown, decompose, dismantle, reuse, disposal, remanufacturing, refurbishing)

The purpose of this page is to guide you in configuring iDempiere for use in a reverse logistics use case. There is no reverse logistics module in iDempiere; however, you can support this topic quite nicely by following the below guidelines. There is quite a bit of diversity in reverse logistics use cases. Here are to points to consider:

Do you perform the same breakdown frequently? Asked another way, is your disassembly process high volume and low mix?
Do you have high degrees of variability in your breakdown process? Asked another way, do you know what to expect when you disassemble your products?
How much control do you need over costing (both in general as well as at the time of disassembly)? Do you need to use lot-based costing to support variable costs?
Do you need to support a Bill of Materials (BOM) and BOM roll-ups your reverse logistics?

Here are tools available inside iDempiere:

Production window - this window is typically used with manufacturing/assembly. It is capable of producing by-products by setting the raw good quantity to a negative value. You designate a primary by-product (the one that contains the BOM), and the remaining by-products have a negative BOM quantity.
Physical Inventory window - this window is a general tool to manipulate quantity on hand of a product. It can easily be adapted to replicate other more specific processes like production or reverse engineering. It has less built-in functionality; however, it also gives your more freedom and flexibility to create the software processes that better reflect your real world.

Production Window for Reverse Logistics

Using the Production window is the quickest and easiest path to executing reverse logistics. You should try this option first before resorting to using the more custom approach with the Physical Inventory window. Let's assume you are disassembling a computer to help us discuss the details. Here are the major components of a computer: 1 chassis, 1 power supply, 1 motherboard, 2 cables, 1 mouse, 1 keyboard and 8 screws. Here are the steps to execute the disassembly process:

Create a Product record for the computer (what is being disassembled).
Create a Product record for each of the computer components (chassis, power supply, etc...).
Create a non-stocked Product record for both labor and overhead.
Use the Cost Adjustment window to set the computer, component, labor and overhead costs accordingly.
Pick one of the components to be the primary product. This is the one you will use to hold the Bill of Material (BOM). It is best if to choose a component where the quantity is one. We will use the chassis in our example. See below discussion regarding options for choosing the right primary component.
Populate the "Chassis" Product => Bill of Material subtab with a record for each component as well as the computer. The computer quantity will be positive. All other component quantities will be negative.
Populate the "Chassis" Product => Bill of Material subtab with a record for labor and overhead if needed.
Create a Production record for your "Chassis" product.
Set the Production => Quantity for the number of units you wish to disassemble.
Click the Create/Update Production Lines button to create the Production Line records according to the previously created BOM.
Update the Production Line => Quantities if needed to reflect real-time changes during the process. Note these changes will result in a manufacturing variance when the Production record is posted.
Complete and post the document to see the results to storage and accounting.

Choosing the Primary BOM Product

In the above example, we choose the chassis as the primary product as a matter of convenience. Here are your options and considerations when choosing a primary product:

If you perform a BOM Cost Rollup, the chosen primary product's cost will be updated when other product costs are changed. This scenario may or may not be desirable since a change in mouse cost will impact the chassis cost during a BOM Cost Rollup.
Instead of choosing a physical product, like the chassis, you can create your own non-stocked product. The product does not need to be stocked to be a part of the BOM. You can even create a custom product per project/disassembly if you wish.
If the extended sum of all product costs (computer, components, labor, and overhead) equals zero, the BOM Cost Rollup assigned cost to your non-stocked product will be zero.

Using the Physical Inventory Window

If you run into a scenario that cannot be achieved using the Production window, you should consider using the Physical Inventory window to support your reverse logistics needs. Here are the points to consider:

You should created a dedicated Physical Inventory => Document Type so that you can separate a normal Physical Inventory one used for reverse logistics. This is practical for readability, automation and validation.
The Physical Inventory window does to know the concept of a BOM. Therefore, you will need to create Physical Inventory record acting like a template per device/lot you wish to disassemble. This is as easy as cloning a Physical Inventory record that is designated as a template.
You will create Physical Inventory Line per product (computer, components, labor, overhead). The quantities will be natural (unlike the quantities in the Production window). Positive quantities will be created. Negative quantities will be consumed.
The Physical Inventory Line => Book Qty will always be zero. Set the Count Qty to the desired quantity.
Each Physical Inventory Line should include a Charge called something like "Disassembly Clearing".
The Physical Inventory window => posting engine does not know that the document should be balanced in terms of the value of Product in vs out. Instead, all deltas will be left in "Disassembly Clearing" account.
Complete and post the document to see the results to storage and accounting.

Please be quick to reach out to me via the mailing list if you have questions, comments or concerns.