A tool is something used to service an asset, it is not a spare part or materials, they are items.
A Tool is a type of item. It has two supporting applications Tools and Stocked Tools which look similar to Item Master and Inventory applications which are used with the Item type. Tools and Items share a similar set of tables. So why would we use a tool instead of a regular item and what are the differences between the two types?
What are the main differences between a tool and an item?
Tools are Capitalized
All tools are capitalized, meaning that they have already been paid for. Issues and returns occur at zero cost, although the tool will have a value when held in inventory.
Items, by default are non-capitalized, and items are issued and returned and use a standard, average, or other costing method. Items can be capitalized by using the Change Capitalized Status action. When changing the capitalized status, you may have to enter a GL account to capture the transfer of value from the inventory control accounts where the non-capitalized items exist.
Tools do not have Storeroom Costs
You may have inferred this from the point that tools are capitalized, but it is worth mentioning separately. There are no cost fields for tools, the closest you will find in the Stocked Tools application is a reference to the last price paid for the tool on the Vendors tab and an Inventory Cost field for rotating tool assets.
For items in the Inventory application you will have many cost fields mainly in the table windows for Inventory Costs, Asset Cost and Inventory LIFO/FIFO Costs. The Inventory application has actions to Change Cost Type or the Inventory Adjustment actions for Standard Cost and Average Cost. None of these will be found in the Stocked Tools application.
Tools are designed to be returned there is an hourly charge rate
When tools are issued to a work order, location or asset a charge is made for each hour of use until it is returned. The Tool Rate is set up in the Tools application using the action Tool/Organization Details. The Issue Current Tool action in Stocked Tools application will have a mandatory Issue To field, this is the person responsible for the tool until it is returned.
In Maximo terminology a tool is designed to be issued and returned. But not all tools are the same. If you have tools that are treated like consumables, essentially thrown-away after use, or rarely returned to a storeroom, and these tools carry a cost which is charged when you issue the tool, then treat these as items in the Item Master and Inventory applications.
If the Tool Storeroom control account incurs the cost of the tool, then the only way of disbursing this cost is to charge for its use, as the value of the tool is not likely to reimburse the control account entirely if it is sold.
There are no reorder details and actions for Tools
In the Stocked Tools application, you will not find a Reorder Details tab as you will find in the Inventory application. Tools are not consumed, they are borrowed from a storeroom and then returned.
The purchasing details vendor, manufacturer, model, promised lead time, will be found on the Vendors tab in the same table window as you also see in the Inventory application. It is the fields in the Primary Vendor section that you will not find in Stocked Tools as the reorder process does not operate against tools. The three reorder actions will also not be found in the Stocked Tools application.
Tools can require qualifications for their use
In the Tools application one visible difference with the Item Master application is the Required Qualifications table window. These are the skills or certifications that a person requires to be able to use the tool.
Tools are used on Crews
In the Crew Types and Crews applications you can define the tools that the crew need to carry in order to perform their work. You do not have the same function with items, although a crew may be issued items in order to carry out work, it is not the same thing.
In the Crews application tool assets are assigned to the crew from an effective date to an end date.
Tools can be marked as being owned by a vendor
When creating a tool record you can check the Outside field to indicate that it is owned by a 3rd party and that you expect to be charged for its use.
Tools are used in Calibration
If you have the Calibration option a tool asset is used as a measuring and test equipment (M&TE) device used to calibrate other assets.
What aspects of Items and Tools are the same?
- Tools and Items share the same set of statuses.
- Tools and Items can be issued, returned and transferred from their storerooms.
- Tools and Items can both be reserved from a storeroom either a soft, hard or automatic reservation. In Stocked Tools you can see the quantity of the tools being reserved but you cannot see the details. You have to go to the Inventory application and use the Add/Modify Reservations action from the List tab, and then filter by the tool in the Item column – a little quirk.
- Tools and Items can be part of a physical count and the balances reconciled. There is no ABC Type and count frequency for tools as there is for items. The two ABC reports will also not be found. The ABC Type field in the List Tab table window of Stocked Tools application can be safely hidden.
- Tools and Items can both be marked as rotating and tracked as individual assets. This might be considered normal for Tools by some organizations.
- Assets can be generated from an Asset Template for both Items and Tool assets.
- Tools and Items can be associated with a commodity group and commodity code.
- A rotating item and a rotating tool can have an associated meter group.
- A non-rotating item and a non-rotating tool can have a meter for recording a reading as part of issuing the item or tool to an asset – metered usage.
- Items and Tools can both be marked with a lot type of LOT, meaning that received items/tools are tracked by lots and there is an expiration date. For tools the lot type will nearly always be the default of NOLOT.
- Items and Tools can both be classified with a set of attributes (a Specification) associated with the classification.
What aspects of Items are not available to Tools?
- Items can be condition enabled, tools cannot.
- Items can have an item assembly structure, tools cannot.
- Items can be part of a kit of parts, tools cannot.
- Items can be reordered, tools cannot.
- Items can be considered a consignment item and be referenced in consignment type invoices as they are consumed, tools cannot, but there is an indicator on tools to say that they are owned by a 3rd party.
- Items can be automatically added as spare parts to assets as they are consumed, tools cannot.
- A depreciation schedule can be set-up for a rotating item, but not a rotating tool.
- There is a View Contracts action for Items in Item Master but not so in the Tools application. But tools can be used in Purchase, Warranty, and Lease/Rental contracts.
The Answer is:
Use a tool if you need to reserve it for a work order and will give it back to the storeroom after it has been used.
Use an item if:
- its cost is charged to a work order, location or asset when it is issued.
- you need to set up reorder details because the tool is consumed.
- your tool is issued as a spare part of an asset, it stays or travels with the asset
“Remember, if you consider it to be a tool, then it probably should not be an item.”