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Generally, Stock movement happens between storage location to storage location, plant to plant or company code to company code. Inclusion of delivery cost, tracking of transit stock can be achieved through STO. Stock shipped out of receiving plant to customer /retailer may receive back to the receiving plant as a return. Again, this return product has to be sent back to supply plant for any rectification, because customer shipping plant can’t rectify the product. This document shall address how the return process happens in STO.

Business Need

  • Product return from Customer
  • Product damage during transit

Process flow

The process starts with the creation of Normal STO till the receipt of return product by issuing plant.

Normal STO:

- Create STO

- Create shipment delivery

- Post Goods Receipt

- Create Billing (if applicable)

- Post Invoice (if applicable)

Return STO:

- Create Return STO

- Create shipment delivery

- Post Goods Receipt in MM Route

- Post Goods Receipt in SD Route

- Create Billing (if applicable)

- Post Credit Invoice (if applicable)

Key organization structure

Company code – 3000 (Intra company code)

Supply plant & Storage loc – 3400 & 0001

Receiving plant & storage loc – 3500 & 0002

warehouse number - (if applicable)

Normal STO Process

ME21N: STO of UB document type is created with the qty 200.

VL10B: Outbound delivery is created

VL02N: Post Goods issue - Prerequisite create Transfer order (Optional)

Transfer order is created.

Post goods issue in VL02N is done.

PO history shows complete inter company STO process.

Stock overview shows, 200 qty. is transferred to plant 3500 (storage location 0002) through STO with delivery.

Out of 200 Qty, 100 Qty is issued to Customer (through MM Route)

Stock qty reduced in plant 3500 (shipping plant to customer)

Customer reported defect in shipped qty of 100. The qty of 200 received back to the plant 3500

Stock is received back to plant 3500. Now this qty 100 needs to be sent back to supplying plant 3400 for rectification.

Return STO Process

ME21N: Return STO is created with the same parameters like normal STO. Return indicator needs to be selected.

MD04: Stock list in Receiving plant shows negative qty due to return

VL10B: Delivery for return STO is created.

MIGO - GR: Goods receipt is performed with reference to the outbound delivery. here, system automatically default 161 movement type based on return indicator in return STO.

MB5T: After goods receipt against outbound delivery, return stock is placed in stock in transit.

VL02N: Post Goods receipt is done ("Post Goods issue" in case of normal STO)

ME23N: The complete return history is shown below. movement type related to intracompany STO are 161 and 671 (in case of inter company STO movement types are 161 and 673)

MMBE: Stock overview shows defect product is being returned to supply plant (3400)

For intra company code STO return, the process ends with posting goods receipt in VL02N. In case of inter company code STO, the process ends with internal credit memo because of billing.

Configuration Overview

Switch off "Availability check" for item categories NLRN (Intra company) & NCRN (Inter company)

Path: Logistics Execution Shipping Deliveries Define Item Categories for Deliveries

Assign delivery type

For Inter company:

Path: Materials Management→ Purchasing → Purchase Order → Returns Order→ Returns to Vendor

For Intra company:

Path: Materials Management→Purchasing Purchase Order Returns OrderStore Return / Return Plant to Plant


With the above process and customization steps, SAP logistics consultants would understand the return STO process and hopefully this would serve a better content for them.

Author Bio:

Mohamed Hasan Rifaie,  a SAP Certified Procurement consultant, is now an employee of Larsen & Toubro Infotech Ltd. He has overall 12 years of experience, out of which more than 6+ years in SAP Consulting (P2P, SRM & WM). He has business experience in various industries like Manufacturing, Electro mechanical Construction and process industries as a Procurement Executive.

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