The document outlines a detailed six-step procedure for handling Parts Encore inventory, including identifying parts eligibility, creating and closing work orders, generating and linking purchase orders with accurate cost entries, receiving inventory into designated locations without creating new SKUs, and enforcing controls to ensure traceability, compliance, and audit readiness, with specified accountability and escalation protocols for exceptions and pending decisions.

Detailed Procedure

Step 1: Identify Parts Encore Source (Asset Management Team)

• Designate the truck/unit as: 
  • Scrap truck
  • Parts Encore truck

Step 2: Create Inspection Work Order (Traceability Anchor) 

• Create a new internal Inspection work order for the specific truck/unit. (Shop Dispatcher)
• Inspect unit and identify usable parts (Shop Lead)
  • If no usable parts identified, skip to step 8
• Close out inspection WO (Shop Dispatcher)

Step 3: Create Encore Work Order (Traceability Anchor)

• Create a new internal Encore work order for the specific truck/unit. (Shop Dispatcher)
• Technician removes parts from trucks and Label, Bag and Box Used Parts (Tech)
• Add each removed part as a line item.(Shop CSR)
• Purpose:  
  • Establishes unit‑level traceability
  • Links physical removal to financial record 

Step 4: Generate Purchase Order from Work Order  (Inventory Parts)

• From the work order: 
  • Create a Purchase Order
  • Select Parts Encore Vendor - 6003 Scrap and Encore Parts Company
• PO must remain linked to the originating work order.
• Do not create standalone POs without a work order reference. 

Step 5: Cost Entry on Purchase Order (Inventory Parts)

• Cost Method: 
  • Original Cost that is listed on Netsuite
• Critical rule: 
  • Do not enter inflated costs that artificially reduce COGS or inflate margin.
  • Use the same Cost listed in the Work Order

Step 6: Final Checks 

• Assign Shop Lead with Work Order for final check (Shop Dispatcher)
• Complete final check to confirm all usable parts pulled and unit is ready for scrapping (Shop Lead)
• Set work order pricing to what was pulled (Inventory Lead)
• Close the work order as completed (Inventory Lead)
• Close out part item lines (Inventory Lead)
• Purpose:  
  • Prevents internal labor or part charges
  • Preserves PO as the financial record

Step 7: Receive Inventory (Inventory Parts)

• Receive PO into: 
  • Used Inventory Location (Anaheim Used / NM Used)
• Do not:  
  • Create new item numbers (no dash‑U or duplicate SKUs)
• Rationale:  
  • Preserves reporting consistency
  • Avoids SKU proliferation

Step 8: Close out NetSuite Work Orders and Inventory

• Closing out Encore Work Order (Shop Dispatcher)  
  • Confirm time tracking and move to Complete to Bill
• Removing asset from inventory (Asset Management)
• Billing Encore Work Order - Apply Credit from Purchase order and apply to WO. (Accounting)

Step 9: Scrap the Unit

• Move Encore unit to scrap area and schedule pick up (Dock)

Controls & Compliance

Required Controls

• No Parts Encore inventory may be received without: 
  • Work Order
  • Linked Purchase Order
• All receipts must reference: 
  • Parts Encore Vendor
  • Used Inventory Location

Audit & Risk Mitigation

• Eliminates:  
  • Untraceable inventory adjustments
  • Cost manipulation risk
• Supports:  
  • Audit review
  • Margin validation
  • Unit‑level traceability

Exceptions & Escalation

• Any deviation from this SOP must be: 
  • Documented
  • Approved by Parts Manager and Accounting
• Escalate to Leadership if: 
  • Cost methodology is unclear
  • System limitations prevent compliance

Encore Process Ownership

Open Items / Pending Decisions

• Decision required: Final selling prices standard for Parts Encore
• Accountability:  

Parts Truck Selection – Management 

Parts PO – Parts 

PO Receipt- Parts 

Adding Parts to Line Items – Shop CSR 

Closing Parts Line Item – Shop CSR 

Billing out PO – Accounting 

Closing out WO – Dispatch