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Advanced Returns Management

 

Technical Data

Technical Name of Business Function

OPS_ADVRETURNS_1

Type of Business Function

Enterprise Business Function

Available As Of

SAP ERP 6.0 Enhancement Package 4

Technical Usage

Central Applications

Application Component

Advanced Returns Management (LO-ARM)

Directly Dependent Business Function Requiring Activation in Addition

Not relevant

You can use this business function to manage returns business transactions with greater efficiency and transparency. This business function supports both customer returns — returns from a known customer to either a company location or an external vendor — and supplier returns — returns from a company location to either an external vendor or another company location further up the supply chain.

With features for recording inspection results, specifying logistical follow-up, determining refunds, and tracking all the documents associated with a returns business transaction, this business function provides you with end-to-end support for the entire returns process. Given the importance of returns in many industries (for example, construction and pharmaceutical wholesale), improving the efficiency and transparency of the returns process helps you to cut costs and improve the level of service you provide to your customers.

Prerequisites

You have installed the following components as of the version mentioned:

Type of Component

Component

Is Needed Only for the Following Features

Software Component

SAP_APPL 604, EA-APPL 604

Not relevant

Once you have activated this business function, make the necessary Customizing settings:

  • You make Customizing settings for customer returns orders in Customizing for Sales by choosing Advanced Returns Management.

  • You make Customizing settings for supplier returns in Customizing for Purchasing by choosing   Purchase Order  Returns Order  Advanced Returns Management  .

Features

Material Inspection

Sales representatives and warehouse employees can enter inspection results directly in the returns order for materials that have been handed over physically at the counter or that have been shipped to the warehouse without prior announcement. Warehouse employees can use the new Material Inspection in the Warehouse transaction to enter inspection results for returns deliveries related to a returns order or for inbound deliveries related to returns stock transport orders. Similarly, they can use the new Material Inspection by Vendors transaction to enter inspection results for outbound deliveries related to returns purchase orders.

This feature helps plan logistical follow-up, increases the transparency with which refunds are determined, and improves the traceability of decisions in the returns process. It also provides a basis for analyzing and evaluating returns processes in order to reduce the volume of returns in the future.

Definition of Logistical Follow-Up Activities

You use logistical follow-up activities to specify the final destination of a returned material. Examples of logistical follow-up activities include Immediately Move to Free Available Stock, Ship to Vendor, Transfer to Scrap, and so on. Sales representatives or warehouse employees can enter the information required for the selected logistical follow-up activity directly in the returns order for materials that have been handed over physically at the counter or that have been shipped to the warehouse without prior announcement. For returns deliveries related to a returns order or inbound deliveries related to a returns stock transport order, warehouse employees can use the new inspection transactions to enter the required information.

This feature reduces the time and effort required to plan and execute the logistical activities associated with returns processing. It also provides a basis for analyzing and evaluating returns processes in order to reduce the volume of returns in the future.

Automatic Creation of Follow-Up Documents

The system automatically creates follow-up documents based on the settings for logistical follow-up and refund control. Follow-up documents include returns stock transport orders, returns purchase orders, inbound and outbound deliveries, goods movements, and so on.

This feature speeds up the processing of logistical follow-up activities and improves user productivity by reducing the amount of user interaction required.

Returns Refund Determination

In the returns order, sales representatives can specify when and how the customer is to be refunded, as well as the refund amount simply by selecting a refund code. Sales representatives and returns managers can use the new refund determination transactions to define the refund amount for customer returns and cross-company-code store returns.

This feature increases the transparency and accuracy with which refunds are determined.

Returns Overview

Employees involved in processing returns can use the Returns Overview transaction to monitor the returns process. This transaction provides an overview of all the steps in the returns process, all the follow-up documents created as part of the process, as well as information on the status of logistical processing and refunding.

This feature increases the transparency of the returns processes and improves the service provided to customers requesting information on their return.

More Information

For more information about this business function, see Advanced Returns Management for Customer Returns and Advanced Returns Management for Supplier Returns.

Example

The following is an example of a returns scenario that can be processed with the business function Advanced Returns Management.

A customer calls a call center and states that they want to return defective goods. The goods are to be picked up by the company. A partial quantity of the returned goods is obviously damaged and therefore scrapped at the branch. The remainder has to be forwarded to the original vendor for inspection. To save transport costs, the return to vendor is done using the supply chain in reverse. After the vendor has inspected the returned goods, the vendor credits you before you issue the refund to the customer. If cross-company-code store returns are involved, financial settlement must take place between the company codes.

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