The flowchart illustrates the Refurbishment Order process in SAP, a critical procedure for servicing defective spares to restore them to a workable condition. This process is particularly relevant in industries with manufacturing facilities, such as automotive or consumer products, where maintaining equipment in good working condition is essential for achieving specified levels of quality, reliability, and operational efficiency.

Refurbishment involves repairing spare parts either internally or through external vendors, after which they are returned to inventory for future use.

This SAP process integrates modules such as Plant Maintenance (PM), Materials Management (MM), and Financial Accounting & Controlling (FICO) to manage the entire lifecycle of refurbishment, from identifying defective parts to returning refurbished items to inventory. It accommodates both internal repairs and external vendor services, providing a comprehensive solution for maintaining a reliable and cost-effective spare parts inventory.

Following is the break down of process shown in flowchart image:

🛠️ Plant Maintenance (PM) Activities

• Create General Maintenance Order (Transaction: IW31): The process begins with creating a maintenance order with quantity -1 or using movement type 262. This brings the defective material to stock. The order creates a reservation for the defective material movement.
• Assign Defective Material with Movement Type 262: The defective material is assigned to the order using movement type 262. This transaction is performed using MB1A (Goods Movement), creating stock for the defective material.
• Create Refurbishment Order (Transaction: IW81): A specific refurbishment order is created, generating a reservation for the defective material (Movement type 261).
• Order Planning for Spares/Service: The refurbishment process is planned in detail, including any spare parts or services required.
• Internal Repair/External Repair Decision: A decision point to determine whether the repair will be done internally or externally.
• Execute Repair Activities for Internal Refurbishment: The maintenance team completes the work, performing time confirmation and issuing needed materials.
• Goods Issue of Damaged Material (Transaction: MIGO): The defective material is issued against the reservation/order using movement type 261.
• Subcontract PR for External Service (Transaction: ME51N): A manual subcontracting purchase requisition is created with valuation type ‘Refurb’. Alternatively, this can be automated through the refurbishment order by implementing BADI (BADI_DIAD_GOODMVT_1).
• Material Required from Stores? (Yes/No): Determines if additional materials from stores are needed for the refurbishment.
• PR for Non-stock Material (Transaction: ME51N): If required materials are not in stock, purchase requisitions are created.
• Reservation Number for Stock Material (Transaction: MB21): For materials available in stock, reservations are created.
• Time Confirmations for Operations (Transaction: IW41): As repair activities progress, time spent on these activities is recorded.
• Technical Completion for Order (Transaction: IW32): Once all refurbishment activities are complete, the order is marked as technically complete, settled, and closed.

📦 Materials Management (MM) Actions

• Issue Defective Part to Store (Transaction: MIGO): For external refurbishment, the defective material is issued to the vendor as Material Provided to Vendor (Movement type 541).
• Create Subcontract PO against External Service (Transaction: ME21N): A subcontract purchase order is created based on the PR, with valuation type ‘REFURB’.
• Create PO against Non-stock Material (Transaction: ME21N): Purchase orders are created for any non-stock materials required.
• Goods Receipt MIGO – Spares IW8W Refurbished: When refurbished materials are received, they are recorded using transaction MIGO (for external) or IW8W (for internal), generating stock for the refurbished material (Movement type 101).
• Service Entry Sheet (Transaction: ML81N): For external services, a service entry sheet is created to record the services provided.

💰 Finance/Controlling (FICO) Steps

• Invoice Verification Vendor Payment (Transaction: MIRO): Invoices are verified and processed for payment, including accounting entries for refurbished price and defective material prices.
• Business Completion for Order: The refurbishment order is marked as complete from a business perspective.
• Settlement for Order (Transaction: KO88): All costs associated with the refurbishment order are settled.

📚 Related SAP Documentation:

1. SAP PM Refurbishment Process Training Guide

This Refurbishment Order process in SAP demonstrates the complex workflow involved in managing the repair and refurbishment of materials, showcasing the integration between maintenance activities, material management, and financial processes. It ensures proper tracking, costing, and execution of refurbishment tasks, handling both internal and external repairs efficiently.