Introduction
Customer Returns are a costly and time-consuming part of the daily life of the supply chain. The company needs to decide on where to return the stock, how to handle the stock when returned, and which process follows for the specific scenario. Having the entire end-to-end process visible through the customer return until it’s received in the warehouse, will provide transparency and clarity to everyone who must decide on an action regarding the returns process.
Prerequisites
Best Practice content (scope items for warehouse management must be active, at least scope items 3BR, 3BS, and 3BU) activated. In addition, customer returns scope item BKP needs to be active too.
Customer Returns in S/4HANA Cloud
In S/4HANA Cloud, the customer returns process is described in scope item BKP - Customer Returns. However, the warehouse-specific parts are described in 3BR Warehouse Inbound Processing, 3BS Warehouse Outbound Processing, and 3BU Warehouse Posting Changes (chapter Business Conditions).
The scope item BKP- Customer Returns covers three customer return scenarios:
1.) Return to seller: A returns order is created (optionally with reference to the original billing document or sales document). Once saved, a returns delivery is automatically generated. After the goods receipt, the inspection takes place at the warehouse. The user can influence when the refunding documents are created: either directly when releasing the returns order, or after the inspection. Finally, the user can decide on the compensation type for the customer: either shipping a replacement or paying a credit memo.
2.) Return to seller with inspection at a customer site: The seller decides to perform the inspection at the customer site before initiating a physical return.
3.) Return to the supplier via seller: After inspection at the seller, the products should be shipped back to the supplier. The supplier decides on the refund towards the seller, while the seller decides on the compensation towards the customer.
Warehouse-specific parts
Customer returns are received in the warehouse in S/4HANA Cloud. The customer returns are received in blocked stock. The stock is inspected. The inspection results are recorded in App Enter Inspection Results - From Warehouse (MSR_INSPWH) and a follow-up action e.g., to post to free available stock with putaway warehouse task creation is triggered.
Even though the returns delivery part is indicated in the BKP scope item, to perform the integration with warehouse-specific parts, you must continue to follow the process according to the delivery type. Please check below the process defined according to each scope item:
Fig 1. Overview of inbound delivery document flow
Goods were sold as part of the process - Sell from Stock, which can be used for further processing in the BKP- Customer Returns process.
In the BKP- Customer Returns process, for both Scenario 1: Goods are Returned to Seller and Scenario 3: Goods are Returned to Supplier via Seller when you create a return order, you specify the follow-up activity 0001 - Receive into Plant. The corresponding returns delivery is created along with the returns order. The returns delivery number can be found in the process flow of the returns order.
Once you finish the goods receipt and confirm the putaway warehouse task as described on the test script (3BR), you continue with the step Perform Material Inspection as described in BKP - Customer Returns.
Check the provided information in the chapter Business Condition in the test script of the scope item Warehouse Inbound Processing (3BR).
Fig 2. Overview of outbound delivery document flow
Complete the activities described in either one of the following options of the test script BKP-Customer Returns.
In Scenario 1: Goods are Returned to Seller
In Scenario 2: Goods are Inspected at Customer Site
In Scenario 3: Goods are Returned to Supplier via Seller
In Scenario 1: Goods are Returned to Seller
In Scenario 3: Goods are Returned to Supplier via Seller
Note: Make sure you use a warehouse-managed storage location (e.g. Storage Location 175W) in the outbound delivery. If not, you use the app Change Outbound Delivery with the role SAP_BR_SHIPPING_SPECIALIST to change the storage location. On the Picking tab, select the delivery item and enter the Stor.Loc. value of the warehouse-managed Storage Location (e.g. Storage Location 175W).
Check the provided information in the chapter Business Condition in the test script of the scope item Warehouse Outbound Processing (3BS).
Fig 3. Overview of outbound delivery document flow - follow-up activity “No Further Activities”
For customer returns by Posting Change, you can make a refund for the returned goods a replacement material, or a credit memo. At returns order creation the refund control is set. Check below the following settings that are possible to use:
If refund control “R Decide Later” is selected as is most commonly the case the returned stock will have after goods receipt posting still the returns order as sales order reference (SOS) in the stock. The stock is still owned and is non valuated stock. This valuation changes only with the inspection decision. Then a posting change gets triggered to remove the sales order reference from the stock.
The inspection triggers as follow-up activity an outbound delivery for valuation goods movement. The outbound delivery gets distributed to warehouse management and creates there a posting change to release the sales order reference (SOS) from the stock. The posting change for the valuation posting removes the sales order reference from the stock but no warehouse task gets created.
Please check the example using Refund Control in the scenarios provided in the test script- BKP- Customer Returns.
• Warehouse Posting Changes (3BU)
Fig 4. Overview of posting change document flow - follow-up activity “Transfer to Free Available Stock”
Fig 5. Overview of posting change document flow - follow-up activity “Transfer to Scrap”
Complete the activities described in either one of the following options of the test script- BKP- Customer Returns.
In Scenario 1: Goods are Returned to Seller: A return order with follow-up activity 0001 - Receive into Plant was created. The return products were received afterwards. In chapter Perform Material Inspection, you chose the follow-up activity 0011 Transfer to Free Available Stock or 0012 Transfer to Scrap.
The posting change delivery gets created for warehouse transfer posting, you then follow the steps below in the test script Warehouse Posting Changes (3BU) to fulfil the warehouse activities.
Check provided information in chapter Business Condition in the test script of the scope item Warehouse Posting Changes (3BU).
Conclusion
The purpose of this blog post is to present you with a better understanding of the returns process and the connection with warehouse-specific parts such as Warehouse Inbound Processing, Warehouse Outbound Processing, and Warehouse Posting Changes.
I hope you find this information useful and I invite you to follow my profile, for similar content, and to leave a comment or make a suggestion if you want me to write about another topic related to EWM area for SAP S/4HANA Cloud system.
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