Now a warranty is a great opportunity to get a sale, but you have to accept the fact that it is a cost your organization. Like everything, a cost should be something you can track, report on, and ultimately justify at the end of the day. Warranty cost should be no different.
Now, warranty can mean a lot different things, but it’s whatever you promise your customers if your product doesn’t meet expectation. Here are some of the common warranty scenarios we’ve encountered.
- Replacement
- Repair
- Materials
- Labor
- T&E for on-site technicians
- Updates (new hardware, software, firmware, etc.)
- Money Back / Credit
How can you track this information in SAP? SAP provides several pieces that you can use to implement the warranty. I’m going to talk about those pieces next.
- Equipment Record
- Start and end Dates for customer warranty
- Start and end dates for vendor warranty
- Measurement Points
- Master Warranties
- Define the warranty
- Define the time frame
- Measurement documents
- Notifications
- Service Contracts
- Many other pieces of SAP can be used to fit your needs, including service orders, sales orders, etc.
Let’s start with the first piece of the puzzle. This is the equipment record. Everything starts here. In order to define the product that the warranty applies to, you must use serialization/equipment records. This master record holds the start and end dates of the warranty. The equipment has the ability to handle a customer and a vendor warranty. I’m not going to go into the vendor warranty here, but suffice it to say, the concepts are the same, and no less important to your business.
Since you can assign it any screen you choose, here a shot of the fields you’ll be looking for.
Notice the big thing here is you MUST enter a warranty beginning date, and then either a Warranty End date or a master warranty. If things are very simple, and you offer a 90 day warranty, then simply enter in the start and end date. It’s that easy (well, it can be). Now there are several things to consider in this. The biggest thing is what is the start date? Setting this value can be difficult because it all depends on your agreement with the customer. Do you begin the warranty when you ship the product? When your customer receives the product? Perhaps when your customer registers the product? This last instance is perhaps the most challenging and is often a requirement when you deal with distributors or don’t deal directly with the end customer. If you are interested in customer self registration of their product, please check out the Renovation by JaveLLin Solutions. Renovation offers an Out-Of-the-Box portal for your customers to register their own products.
Now, when dealing with the end date, you can always just set a date. The better way to handle it is the master warranty. The master warranty is a way to build all the rules of your warranty into a reusable piece of master data. For example, in the sample listed above, you offer a 90 day warranty. If you use a master warranty, you don’t actually have to calculate when is 90 days from today. You simply attach the master warranty, and it will calculate the end date for you. In addition, the master warranty allows you build in complex rules for your warranty. This is especially valuable when you start do things like 5 years, 50,000 miles type warranties. Master warranties allow you to determine the warranty one time, and reuse it over and over. The major drawback is there is no easy way to automatically determine the master warranty or end date automatically. You can use a user exit to determine this based on your rules. Currently JaveLLin Solutions is creating a product that provide you an interface, similar to SAP pricing, to allow you to automatically determine which master warranty should be placed for any equipment record. Please contact us if you would like to be an early adopter for warranty end date.
TXN: BGM1, 2 & 3 = Master Warranty
You will need to create the characteristics for the warranty in addition to the baseline configuration. Then you can define all your rules. I’m not going into a lot of detail in this class, but if there is interest, I’ll create a bonus lesson on using the master warranty.
Now, if you use a master warranty for more than just Time, you will need to use measurement documents. These again need to be assigned to the equipment record, and then you can create measurement documents. This is common if your warranty is based on mileage, usage hours, or anything else that is NOT simply a factor of time. Again, I’m not going deep into this, but I’ll save it for a bonus lesson.
TXN: IK11, IK12, IK13 = measure document.
Finally, the last thing I want to cover in this lesson is actually making use of the warranty date. The most common place to check for warranty information is inside of a notification. This is where we tie together the hard work we just did setting the warranty dates. In your notification, you just need to be sure to include screen area 080 somewhere in your notification.
Setting this field allows you to do an instant warranty check, provided that you input the equipment record (or serial #/material). It will instantly let you know if the equipment is still under warranty. At a notification level, this will give you instant visibility to anything that is under warranty.
There is however a disconnect, this information is not passed on to the sales order or service order in the event of follow on activities. If you are interested in an out-of-the-box application to help you with this, check out Renovation by JaveLLin Solutions.
Now you have a good idea of how to begin tracking warranty information in SAP. Remember, step one is to enter the data. After that, you can begin tracking the data. However, you get a quick win by entering in the warranty information. You can instantly know if your customer’s product is still under warranty. And if it isn’t, you can quickly notify the customer that the product is no longer under warranty, rather than perform a replacement/repair, just because the customer told you it was under warranty :). We will talk more about utilizing this information in a future lesson.
If you have any questions about this, feel free to reach out to me directly:
mpiehl@goJavellin.com