The use a FOC Invoice, which is equivalent of a PO in this case, to receive the material from the customer is the standard practice for the MRO. It is a document widely accepted in customs and for most fiscal obligation. The RMA might be issued for technical aspects but it does not satisfies the fiscal obligations for material logistics and accountability.
Under no circumstances you should set the material as company’s upon arrival. That will mask company’s assets no matter what, but to make it very clear, imagine if you have a repair station that is low valued in comparison to the asset it repair. When the material to be repaired is set put under company’s property, the company value will be very different as inventory sums to the it. It needs to remain proprietor owned in company’s possession.
Another FOC PO is also the standard for MRO to satisfy the logistics and the RMA is a support document.
@Leibnitz Germanio Thank you for your reply.
I totally understand that RMA is not a right option to have the product back to company just for repair.
wondering what is FOC, can you elaborate on it?
Looks like our process need to be recalibrated.
@Leibnitz Germanio Understood. so the PO will be created by MRO and the ownership on purchase order line should be Customer Owned.
another question, in order to have the Customer Owned object back to customer location, apart from a customer order deliver it, any other ways to have it at customer location?
It is not uncommon to have it set at the original PO, i.e, to send it back to the same location from where the material departed. But I think I do not fully answered your question. I will review a documentation I prepared for a very complex customer plus ask a very knowledgeable colleague what other ways there might be. One warning good to issue is logistics are very localization prone.
@Leibnitz Germanio Thank you.
Hello, Ronhu,
I spoke with my colleague and her first recommendation is to have the process well mapped, as no general recommendation may fit for every case. Nonetheless, she agrees it is a best practice the use of the PO. There are a number of logistical operations impossible without one like importation and exportation.
As I said, your customer is likely to need a PO to get the material back too. My colleague did not come up with another suggestion different than the one I already gave you for returning the material, unless she said, the mapping process shows there is one. But, as I said, it is not necessary to have a request for that at the end of the process. This can be set up in the beginning. The RMA can contain a FROM and a SHIP BACK TO field to parametrize the PO preparation.
I stress again that what called our attention very much was setting the material as company’s, which masks its assets making it impossible to use the system for calculating its balance sheet, to mention the biggest of the problems alone.
@Leibnitz Germanio appreciated your help.
