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Day Hire of Rental Tools

Somebody asked me the other day how to handle the day hire of rental tools in Maximo. You have Lease/Rental Contracts but that would be too much set-up for a one-off rental of a tool, this is after all a purchase, besides Lease/Rental Contracts work with rotating items, and hence would require the creation of an asset, again too much for a few days use of a hired tool. Even if you were hiring the tool for a longer period, perhaps used by multiple work orders and could warrant the creation of the asset, Lease/Rental Contracts work with the Item Master application, not Tools, although you can type a rotating tool item on a contract line. You are not buying the tool, so if you wish to formalise the receipt of the rental tool or plant hire and record its return, how would you handle this in Maximo?

The rental tool may be for a single work order, or it may be hired by a storeroom and lent out to work orders that need it, charging an hourly usage. In either case, you would want to track the tools that are being rented and you need to consider whether safety or visual inspections are needed and how to handle a variable period of hire. This article will look at how this can be achieved in Maximo without the use of Lease/Rental Contracts.

We will look at two scenarios:

Summary

This article of 20 pages requires a summary to set the scene of where each scenario is heading and what I found which you can find in the details that follow.

For the day hire of a non-rotating tool we were using a direct issue tool item against a work order:

For the day hire of a rotating tool the charge was being made against the CENTRAL storeroom which was charging work orders for its use through an hourly tool rate.

The storeroom was charged for the actual services received. The tracking of the tool receipt/return involved MATRECTRANS transactions, and as it was a rotating item then also ASSETTRANS transactions. It is believed that you need to return the asset to the originating receiving storeroom for it to be returned, I will verify this in another article. Work orders generate a reservation on the tool, which is issued from the storeroom, but it must be returned with an Inventory Usage record. The hourly tool charges are made on the work order, they are not created as a result of the issue and return of the tool from/to the storeroom.

In both scenarios, on the purchase order we have kept the same principle of using standard services for the charges against which an invoice will be raised, and a separate zero-cost tool item for tracking the receipt/return of the tool.

Day hire of non-rotating tool

If we create a purchase order with a tool item and then return it the net effect will be a quantity of 0. Normally, if you have a cost on the PO line then when you return the tool there would be a negative cost, and an expectation of receiving a credit note against the original invoice. Think of the case where I am returning an item under warranty and I do not want a replacement, you would expect a credit note to negate the invoice. We do not want this, we want to register a return, but not in a way that attracts a credit note.

We do want to reference a tool item so that we can monitor how often we hire the tool. We also need to record the number of days we rent the tool for, and there may be other charges, for example delivery and collection fees.

The purchase order to be created has a tool item at zero cost, allowing us to register the rental of the tool and return it. The PO will also have two standard services, one for TOOLHIRE – Tool/Plant Hire Rental and one for TOOLDEL – Tool Delivery/Collection. These are direct issue PO lines made against a work order. 

I’ve created two new Service Items:

I’ve used the action Change Status and set the new status to ACTIVE and checked the field Roll New Status to Organizations, so that the service item is also ACTIVE in the EAGLENA organization.

I have also created work order 1347 so that we can track the costs of the rental hire and the work order has been approved so that we can reference it on a PO line.

Purchase Order 1103 – Hire of non-rotating tool Arrow Board, has been created against vendor HELWIG. It has three lines:

Total net cost is $200.00 with $13.00 tax for total cost of $213.00. Each PO line is marked as Issue on Receipt and references work order 1347 with GL Debit Account of 6220-300-400.

The PO has been approved (APPR). The hire of the Arrow Board is set for 5 days, but we can return it earlier if we have finished with it. Hire is based on whole days, either we need to deliver it back to the tool hire company by 17:00 or the tool hire company must pick-up by 16:00 for us to get a reduction in the hire cost.

Delivery of non-rotating Tool

On the Receiving application when the Arrow Board has been delivered, we use the Material Receipts tab and button Selected Order Items to check the tool in. As it is a tool you will need to enter a person in the Issue To field, I entered AJE – Andrew Jeffery, he will be responsible for the tools return. On Save of record the Receipts status will show as PARTIAL.

We have also received the Delivery service of the Arrow Board, and so on the Service Receipts tab we can use the button Select Ordered Services and select the TOOLDEL – Tool Delivery item, changing the Quantity Due to 1.

Return of non-Rotating Tool

The Arrow Board tool was only required for 4 days and can be collected at end of the day (by 16:00), so we have changed the Quantity Due to 4 days and added the Remarks – Hire for 4 days instead of 5.

The Quantity Due on the TOOLDEL item has been changed to 1 with the Remarks – Collection of Arrow Board.

If you have a need to check the tool at the point in time it is being collected, then you could have marked the PO line as Receipt Required and then used the Change Inspection Status action. But which of the three PO lines would you mark this way?

It depends on the purpose of the Inspection:

The final service receipts show three lines, one for the amended quantity of tool hire days, and two service receipts one for the delivery and one for the collection. All are at COMP Inspection Status, it was only PO Line 2 that had the inspection.

When the tool item has been physically returned to the vendor, then on the Material Receipts tab we use the button Select Items for Return and select the ARROW BOARD tool item. Notice it is a positive quantity being returned.

The final material receipt shows two lines, one for the RECEIPT and one for the RETURN, the return is converted to a negative quantity.

The Receipts status is still at PARTIAL with a Received Cost of $170.00. As we have reduced the quantity of days hired, presumably under agreement that you could return the tool early, then you should revise the PO and change the quantity of line 2 to 4 DAYS, and then approve the PO again. This will set Pretax Total to $170.00 and Receipts Status will now be set to COMPLETE. It is good practise to change the quantities using a PO revision when you know all quantities have been received, rather than leaving the Receipt Status set to PARTIAL.

While this scenario has been a direct issue Purchase Order, the process of using a zero-cost line for the tool hire and return would work equally well if it were a stocked tool, as we will see in the next illustration.

Work order 1347 shows the three Actual Service transactions and a total service cost of $170.00. There are no Actual Tool (TOOLTRANS) or Actual Material (MATUSETRANS) records, the RECEIPT/RETURN transactions for the tool are MATRECTRANS records.

Rental of rotating tool

In this scenario the CENTRAL storeroom will rent a rotating tool DUMP TRUCK for a period of 60 days, costing $15/day, total $900.00 with $50.00 for delivery and the same for collection. This will then be charged out to work orders at the hourly rate of $10/hour, based on an 8-hour day this would be $80/day. To break even, the storeroom needs 15 days of hire from work orders including running costs and minor maintenance.

DUMP TRUCK already exists as a rotating tool.

Purchase Order 1104 – Hire of Dump Truck for 60 days, has been created against vendor HELWIG. It has three lines:

Total net cost is $1000.00 with $65.00 tax for total cost of $1065.00. PO line 1 is against storeroom CENTRAL and is therefore not marked as Issue on Receipt, the two service items are marked as Issue on Receipt. All three items reference GL Debit Account of 6600-800-200 which is the tool control account for the CENTRAL storeroom in BEDFORD site.

The PO has been approved, status is now APPR. 

Delivery of Rotating Tool

On the Receiving application when the Dump Truck has been delivered, we use the Material Receipts tab and button Selected Order Items to check the tool in. The Inspection Status will be WINSP – Waiting Inspection.

The PO Line was marked as requiring inspection and so we use the Change Inspection Status action and select the row to complete the inspection, it has arrived in good working order, a little dirty perhaps.

As the Dump Truck is a rotating tool, we need to go through the serialization process and use the action Receive Rotating Items. I have used the Autonumber button, our asset will be 2120, I have entered the Serial Number taken from the nameplate – 42136-A217. This will move the inspection status from WASSET – Waiting for Serialization, to COMP – Complete.

This completes the transfer from the holding location (RECEIVING) to the CENTRAL storeroom. The Receipt Status is now marked as PARTIAL.

We have also received the Delivery service of the Dump Truck, and so on the Service Receipts tab we can use the button Select Ordered Services and select the TOOLDEL – Tool Delivery item changing the Quantity Due to 1. I added the Remarks – Dump Truck Delivery.

The Service Receipt record goes straight to COMP – Complete, for the inspection status, I chose not to require a delivery inspection as the tool item being received into the CENTRAL storeroom is where we perform a safety inspection. Notice, the remarks are recorded in the Line Item section in the details area for the service receipt. The Received Cost is now $50.00, for the delivery of the Dump Truck.

In the Stocked Tools application, the CENTRAL storeroom now shows a Current Balance of 1 for the tool DUMP TRUCK, and in the Rotating Tool Assets tab you would see a record for asset 2120. We will mark this tool record as “Requires hard reservation on use?”.

The tool rate for the use of the Dump Truck is entered in the Tools application and action Tool/Organization Details, I have entered the rate of $10.00/hour. I’ll make reference to this point a little while later.

If you always hire in Tools from the same vendor then if the Tool is initially created as an Outside tool, then the Outside Vendor field will be enabled. We get Dump Trucks from multiple vendors, ones that are local to each site.

Reserving and Issuing the Rotating Tool to a Work Order

In the Work Order Tracking application, I have created work order 1348 – Clear site behind garages, this is against Location LEXINGTON. On the Plans tab I have entered a Planned Tool for the DUMP TRUCK tool required tomorrow morning for 32 hours, notice the default rate is $10.00/hour. The reservation will be made against the CENTRAL storeroom. The dump truck will be issued to AJE – Andrew Jeffery. Tools have to be issued to someone who is responsible for its return.

The work order has now been Approved (APPR) using the Change Status action, this will create a hard reservation on the CENTRAL storeroom.

In the Stocked Tools application for the DUMP TRUCK tool, you can verify the Reservations using the action View Tool Availability and navigate to the Reservations tab. Request 1183 for work order 1348 is shown.

The action Issue Current Tool is used to issue the DUMP TRUCK tool to work order 1348 and issued to AJE – Andrew Jeffery, he will collect tomorrow at 07:00. As it is a rotating tool, we need to select the rotating asset – 2120 in this case. The transaction type is ISSUE. Note. The asset 2120 has also moved from the CENTRAL storeroom to the LEXINGTON operating location. If you looked at the asset record in the Assets application the action View Asset Move History will show a MOVED transaction.

This is recording the tool leaving the storeroom, but this is not a financial transaction to record the expense for the use of the tool, I’ll show how that is done a little later.

Returning the Rotating Tool after use, and charging the Work Order for its use

The Issue Current Tool action also allows you to select a Rotating Asset with a RETURN transaction type. You may get a couple of errors when trying to use this.

The error “BMXAA1851E – Rotating asset must exist within the location from which it is being issued.” is issued if the Location field does not reference the same location where the asset was issued to, I issued to LEXINGTON and so I need to return from LEXINGTON.

It would be best to enter the work order first as that fills the Location and Asset fields from the work order. If you just entered the Location, it may default in the Asset if there is only one asset at that location, 2120 in this case, then you would end up with another error “BMXAA1794E – Asset and rotating asset cannot be the same.”

The details as I have entered it for a RETURN transaction are OK, except when you use the OK button you will get the information message “BMXAA6185I – Please use the Select Items for Return action to return rotating items.”. You can no longer return or transfer rotating items using the Stocked Tools application, you need to do this from the Inventory Usage application. The message for the transfer of a rotating tool is “BMXAA1825E – Use the Inventory Usage application to transfer a rotating item.”

Inventory Usage is an easy application to use. I created a new record, the usage number is autokeyed, 1020 in this case, I entered a description – Return of rotating tool 2120, and a Usage Type of ISSUE and the From Storeroom of CENTRAL. Whether you are issuing an item or returning it the usage type is ISSUE, and the same storeroom is used for the return.

Then you use the button Select Items For Return and make a query probably by work order (1348) and Item Type TOOL.

You will then need to save the record and use the action Change Status to Complete before the returned tool asset will be found in the storeroom, increasing the current balance and waiting to be issued to another work order.

In Work Order Tracking application and Actuals tab and Tools subtab, I used the Select Issued Tools button to be able to reference the time I used the tool. 

I change the Tool Hours to 26.00. The Rate defaulted to 0.00, I expected it to be 10.00, so I did change it.

When I later reviewed the Asset record, I found that the Tool Rate field was blank, this can be found in the second column in the asset’s Details section below the Item Type of TOOL. I then realised I had set the tool rate of 10.00 after the point at which I had received asset 2120 into the CENTRAL storeroom, and so the Tool Rate had not been set. I have verified this with a second PO that I have received and issued to another work order, the Tool Rate on the asset is derived from the Tool/Organization Details when the tool asset is created.

It is the creation of the Actual Tools record on the work order that creates the financial transaction for the expense for the use of the tool, it is not created by the issuing of the tool.

I’ve now completed the work order using the action Complete Work Order, its status is now COMP.

Deleting the Tool Reservation

If you look closely at the tool in the Stocked Tools application while there is now a Current Balance of 1 there is a Quantity Currently Reserved, and a Hard Reserved Quantity of 1. A review of the View Tool Availability action and Reservations tab that we saw earlier will show that the reservation for work order 1348 still exists.

If we close the work order using the action Close Work Order in the Work Order Tracking application then the reservation will have been deleted and the values of Quantity Currently Reserved, and Hard Reserved Quantity will be set to 0.00.

This is controlled in the Organizations application and the Work Order Options – Other Organization Options, a setting called “Clear Material Reservation When WO Status Changes:” with the radio button option for To Complete or To Closed. In the EAGLENA organization the setting was set to “To Closed”.

Perhaps in another article I’ll take a closer look at the handling of reservations and the System Property mxe.app.inventor.updateReservations. You can delete unwanted reservations in the Inventory Usage and Inventory applications which both have the action Add/Modify Reservations, unfortunately Stocked Tools does not have this action.

Return of Rotating Tool

This is, however, an article about the renting of tools and of their return back to the vendor, the tool hire company, so we will complete this article by performing the return from the CENTRAL storeroom.

In the Receiving application, and for PO 1104, we use the button Select Rotating Asset for Return and select the record associated with asset 2120.

This creates a RETURN transaction in the MATRECTRANS object with a negative quantity of -1.00.

In the Assets application for asset 2120 the status is automatically changed to DECOMMISSIONED and the Returned to Vendor field is checked. There is no further asset move transaction (ASSETTRANS) with the return to vendor, the last transaction was the move from the operating location LEXINGTON to the CENTRAL tool storeroom.

To complete this article, we need to settle the standard services by using the Selected Order Services button in the Service Receipts tab of the Receiving application.

This creates the two transactions with a total Received Cost of $1,000.00. 

For PO Line 2 the Inspection Status is still at WINSP – Waiting for Inspection. The Quantity can still be changed until the inspection status has changed to COMP. You can also over deliver on the quantity as long as this is within the service receipt tolerance.

The action Change Inspection Status is also required for a RETURN transaction, if the PO Line was marked as Inspection Required. 

After save of record all Service Receipt lines are now at an inspection status of COMP – Complete. The PO’s Receipt status is still showing PARTIAL although we do not expect to make any further receipts.

Therefore, on the Purchase Orders application we should use the action Complete Receipts and in the dialog that opens select the DUMP TRUCK tool item. We ordered a quantity of 1.00 and the net Quantity Received is now 0.00 because the dump truck has been collected by the vendor, and so we would be happy to say that this receipt is complete. It has a zero line cost, because the rental hire costs have been captured on the standard services.

The PO action Complete Receipts sets the Receipt Status to COMPLETE from PARTIAL.

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