How to Repair, Rework, and Disassemble Finished Goods Using Production Orders in Dynamics 365 Business Central

Microsoft Dynamics 365 Business Central allows manufacturers to efficiently manage finished goods repair, manufacturing rework, and product disassembly using production orders. This ensures accurate inventory valuation, proper cost capitalization, and complete traceability of repair activities.

Manufacturers can use production orders to capture repair labour, component consumption, and routing costs, ensuring the repaired item reflects the correct inventory value and production cost.

For organizations requiring expert guidance in configuring repair, rework, and disassembly workflows, working with experienced professionals through our Business Central consulting services can help ensure accurate cost tracking, inventory control, and optimized manufacturing operations.

Repairing approaches may vary depending on the business scenario. In most cases, return repaired finished goods to inventory after correcting defects. In other situations, manufacturers may choose to disassemble the finished product to recover usable components and account for disassembly labour costs.

Business Central enables manufacturers to perform manufacturing rework and finish goods repair using production orders. This approach allows organizations to consume the defective finished item, apply repair labor and additional components, and accurately capture repair costs within the production order.

In Business Central, a finished good can be repaired by using Production Orders. This method ensures repair costs, including labor, material consumption, and routing operations, are properly accounted for and reflected in inventory valuation and financial reporting. The repair process can make use of the existing production Bill of Materials (BOM) and routing configuration, as these elements will undergo modifications as part of the production order.

In the below example, “Finished Good 1” has already been assigned a production BOM and routing. This is the normal setup to produce an item.

To handle repairs of the above item, we must create a new Production Order as usual.

Then we should remove all the components in the BOM list and add the same finished good as a new component.

We can also change/replace the routing line to provide the cost and effort of repair if required. This allows manufacturers to capture repair labor cost, machine usage, and operational effort as part of the manufacturing rework process.

When posting the production journal, the output will be posted into the inventory with repair cost provided. As a result, the finished good is re-valued in inventory with the updated repair cost, ensuring accurate cost accounting and inventory valuation.

Business Central supports reverse manufacturing by allowing finished goods to be disassembled using production orders and disassembly BOM. This process enables manufacturers to recover reusable components, account for disassembly labor costs, and maintain accurate inventory and financial records.

In Business Central, users can disassemble a produced item using in the same way they used to produce the item. This method uses the production order and BOM with a negative consumption quantity. Below are the steps to follow:

Business Central allows manufacturers to reopen finished production orders to correct errors, update consumption, adjust output quantities, or modify repair and production costs. This ensures accurate production records, inventory balances, and financial reporting.

Although this is not a rework of a finished good, there may be situations where corrections or updates are required in a Finished Production Order. In such cases, the order can be reopened to apply the necessary changes. The Reopen action on the Finished Work Order page allows a finished production order to be reopened only once. After it has been reopened and updated, it cannot be reopened again.