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SAP for Automotive Vehicle Management System

Warranty

Vehicle Management System

Overview and WTY Basics


Functionality and WTY Concepts
Integration to VMS

There is no time to waste

Cost savings potential


Consider the Case of a $1,000 m
Manufacturer
the average company spends
approximately 3 % of revenue annually
on warranties
=> $30 m

Conservative estimates show that this


manufacturer could cut its spending by nearly
50%:
cut administrative expenses by $500k
save $1.9 million in fraud reduction
recover $5.6 million from supplier
pocket an additional $6 million in
detection and prevention of future
product issues due to a better
understanding of past defects
By Grieg Coppe -- TWICE, 2/9/2004

Top 25 U.S.-Based Warranty Spenders


in 2004 Source Warrantyweek.com

Warranty Claims statistics

Warranty Claims by Industry


First Quarter 2004

2.7

2.5
2.3

Source: Warranty Week

Warranty Business Challenges


increasing customer demands
increasing variety of warranties (marketing strategies)
better possibilities for analyses (quality consciousness)
high number of claims in Europe due to new laws
requirements to forecast warranty expenditure
shorter product life cycles: higher warranty costs
many partners involved
branch/dealer/subsidiary
sales subsidiary
producer
supplier

OEM

Supplier

Claim submission

Reimbursement

Distributor
Claim submission

Reimbursement

Dealer

SAP Warranty Overview - IT Requirements

High number of warranty claims


(I.e. hundreds thousand per week)

Increasing variety of warranties


High percentage of automatic processing
Better possibilities for analyses
Cater for flexible business processes
Interface with numerous

various internal and external system

Web-enabled processing

SAP for Automotive Warranty Processing &


Analytics

Warranty Processing
& Analytics

Efficient claims processing application that automates the process and


integrates warranty claim data with business functions for financial
accounting and quality management.
Customers are looking for security and reliability today, quality issues must be identified efficiently
and solved before cost increase and customers satisfaction descreases

Channel Management

OEM

Claim submission

Reimbursement

Importer
Claim submission

Reimbursement

Dealer

Claim submission & status tracking


Recalls and technical campaigns
Return parts including label printing
Credit and debit memos
Web Interface for dealers

Analytical Warranty

Failure pattern for parts and Fraud


detection analysis
Returned parts analysis
Participation level for recall campaigns

Warranty Processing

Customer

Process support for all claim types (warranty,


good will, recalls)
Multiple warranties
Catalog integration (defect codes, parts, etc.)
Rule engine for validation and process automation

SAP Warranty - Basics

Most of the time a warranty


claim starts with a customer
contacting its dealer

Dealer

Customer

SAP Warranty - Basics

The customer contacts its


dealer about a failing object
the dealer sold to him.

Object
Dealer

Customer

SAP Warranty - Basics

The dealer inspects the failing


object and verify the warranty
terms in the object documents

Object
Warranty

Dealer

Customer

SAP Warranty - Basics

After inspecting the object and


verifying its warranty eligibility the
dealer decides to contact the importer

Importer
Dealer

Object
Warranty

Customer

SAP Warranty - Basics


SAP Warranty processes
This is generally the first step with the
SAP Warranty solution

The previous step represented by the


gray arrow is not executed in standard
Warranty solution

This particular step may be executed in


a Dealer Management System (DMS)

The DMS is generally owned by the


dealer, sometimes provided by the
importer and operated by the dealer

An interface between the SAP Warranty


solution and the DMS could be built

SAP Warranty - Basics


Warranty - The importer perspective
The SAP Warranty solution is seen
from an importer perspective

The importer receives warranty


reimbursement requests from claimants
which are most of the time dealers and
generally customers

The importer forwards the


reimbursement request to reimbursers
which are generally vendors

Dealers are represented in SAP by


customers with Customer Master Data

Reimbursers are represented in SAP by


vendors with Vendor Master Data

Customer Master

Vendor Master

SAP Warranty - Basics


What does the importer perspective mean?

The importer perspective refers to the


relationship claimant-importer-reimburser

The importer may assume both the role


of the importer and reimburser

The importer may be the Sales&


Marketing entity and the reimburser the
Manufacturing entity

The importer may be the warranty


department and the reimburser the
production department

Partners and Business Application Areas

Warranty Claim

Importer

nt

bu
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me

Re
im

Wa
rra
bu

r se
me

nty

Cl

Dealer

aim

nt

Local Supplier

Re
im

Wa
rr a
n ty

Cl a
im

Reimbursement

Warranty Claim

OEM

Reimbursement

Supplier

SAP Warranty - Overview - Concept

Claim = One Business Document


with access to all information
One Screen for manual claim processing
High Integration into SAP ERP functionality
Flexible tool set to manage changing business requirements
Tracking of all changes and events
Supports automatic claim processing by means of validation and
substitution rules
Support special processes such as returned parts processing, Recallcampaign management and Claim split

Flow of Information, Material and Value


Flow of Information, Material and Value

OEM

Dealer

Importer

Warranty Claim

Warranty Claim

Authorisation Claim

Authorisation Claim

System:
Authorisation
Reimbursement
Parts

Authorisation

Master Data
Processing

Reimbursement
Parts

Communication Channels

Customer

Dealer
Interface
Importer
Interface
OEM

Warranty Claims Processing

Transmission
to partner
Status tracking

Validation of claim
auto correction
rejection or acceptance
manual processing
FI posting

Pre-check
Master data validation

Entry of claim via Portal or


electronic transmission

User Interface

button
access&upload
external documents

error message
rule engine
header level

show header
data

version data

Pricing
all claims related
to vehicle:
tree representation

item data
selected version
to show on
detail screen

Integration Document Management System

Linking documents
(texts, MS Office,
graphics, mails,...)
to warranty claim
Access to Business
Object Navigator from
Warranty Workbench
Administration of
documents via
Business Object
Navigator

SAP Warranty - Basics


The different versions are
sorted in 4 main categories:
IC, IV, OC and OV
Version type
Outgoing Vendor OV

Version type
Outgoing Claimant OC

Version type
Incoming Vendor OV

Version type
Incoming Claimant IC

Importer
0 1 3 4 days
0 2 2 7 km
0 7 2 3 hr

Dealer
Warranty claim

Object

Repl. part ABC x 2 pc $25->$50


Repl. part XYZ x 5 pc $12->$60
Labor XYZ
x 13 hr $10->$130
Overnight stay Z x 2 pc $65->$130

Vendor

Warranty

Time
Mileage

I.e. 2 years
I.e. 3000 km

Operating time I.e. 2000 hr

Customer

SAP Warranty - Basics


Versions categories
The different versions are sorted in 4
main categories: IC, IV, OC and OV

IC stands for Incoming Claimant


IV Incoming Vendor
OC Outgoing Claimant and
OV Outgoing Vendor

Claim Status

Receive Version

Version sent
to OEM
Claim Version received

Copy Version
Call Rule Engine

Version copied
to Outbox OEM

Send Version
Claim is checked

Claim is checked

Create Acc.-Doc.
Claim Version copied
to Outbox Claimant
New Claim Created
Posted to FI
Claim version copied

Sent to
Claimant

SAP Warranty P. building Actions


Pre-crediting and post-crediting
Pre-crediting and Post-crediting are
common terms in the warranty business

Pre-crediting refers to a warranty process


where the importer reimburses the claimant
before trying to get reimbursed by the
vendor

Post-crediting refers to a warranty process


where the importer forwards the claimantrequest to the vendor. The importer
reimburses the claimant only after getting a
positive answer from the vendor

SAP Warranty P. building Actions Control


How does the importer orchestrate
the sequence of events ?
The importer can freely define a sequence of process steps
The sequence is defined in something called Action control
The steps in the matrix are called actions
Business process steps are represented by actions in SAP

SAP Warranty Claim Validation

Claim

Claim
X rejected

accepted
+

Message log

SAP Warranty - Process - Part return


Sometimes the importer and/or the vendor
request from the dealer (and possibly the
importer) to return the failing parts for
control and/or quality purpose

Importer
0 1 3 4 days
0 2 2 7 km
0 7 2 3 hr

Dealer
Warranty claim

Object

Repl. part ABC x 2 pc $25->$50


Repl. part XYZ x 5 pc $12->$60
Labor XYZ
x 13 hr $10->$130
Overnight stay Z x 2 pc $65->$130

Vendor

Warranty

Time
Mileage

I.e. 2 years
I.e. 3000 km

Operating time I.e. 2000 hr

Customer

SAP Warranty - Process - Recall

Recalls happen in a different context than a


regular warranty

Quality Assurance people detected a (risk of)


failure with some warranty objects. One or
more components and/or the final assembly
are causing the failure

The vendor and/or the importer makes the


decision to recall proactively the warranty
objects to execute some operations and/or
replace the suspected parts

The vendor or the importer generally


reimburses the parts, the services and sublets
originated from the replacement of the failing
parts

SAP Warranty - Basics


Financial postings
The warranty versions may result in financial
postings in SAP FI/CO* module

Financial postings generally happen for


Outgoing Claimant and Incoming Vendor
versions. They may also occur for Incoming
Claimant and Outgoing Vendor versions

Furthermore financial postings may be


reversed. This may happen, for example,
when the claimant did not return the failing
parts as requested by the importer.

*FI/CO stands for Financial/Controlling

Integration of Pricing

Integration
SD
Message Determination
Messages
Org., Cust. ...

Automotive
VMS
Vehicle Master Data
Actions

IDOC/PRINT

Pricing
Account Determination
Conditions
Accounts
Org/Mat/Cust.
Org./Cust./Claim Type
.... -> Cond. A
Customer
Address ...

CO

Equipment
Functional Location

CS

- Measuring Point
- Master Warranty

Measuring Point
- Characteristic
- Documents

Warranty Claim
- Material
- Customer
- Equipment - Vendor
- Condition
- Messages
- Acct. Determ. ..........
- Catalog of Defect Codes

Controlling Area
Operating Concern
Company Code
Cost Elements
Cost Centers
Internal Orders
Characteristics
Value Fields

Master Warranties
Characteristic 1
Characteristic 2.......

CA

Characteristics
in Classification System

Vendor
G/L Accounts
Customer Accounts

FI

MM

Material
Master Data

CEM

Catalog
Construction
Equipment
Management

Warranty

Integration to Vehicle Management System

SAP Warranty VMS and Warranty

VMS object in Warranty

The VMS object is a known object in SAP


Warranty

However, we need to create an equipment


and assign it to the vehicle to be able to
process Warranty (DIC2 release)
Equipment
object

VMS object

SAP Warranty VMS and Warranty

Vehicle with VIN # in VMS

VELO is the recognized object type for


VMS object in WTY

The vehicle VIN # is the recognized ID in


standard warranty

Other vehicle ID can be customized

SAP Warranty VMS and Warranty


Furthermore the Begin Warranty
date needs to be defined

Importer

Dealer

Vendor

Object
Warranty

Time

I.e. 2 years

Mileage I.e. 3000 km


Operating time I.e. 2000 hr

Customer

SAP Warranty VMS and Warranty


One counter - Measuring point - needs
to keep track of each measuring value

Importer
0 0 0 0 days
0 0 0 0 km
0 0 0 0 hr
Dealer

Vendor

Object
Warranty

Time
Mileage

I.e. 2 years
I.e. 3000 km

Operating time I.e. 2000 hr

Customer

SAP Warranty VMS and Warranty


We also need to have warranty terms Master Warranty - assigned to the
vehicle to be able to process Warranty

Importer

Dealer

Vendor

Object
Warranty

Time
Mileage

I.e. 2 years
I.e. 3000 km

Operating time I.e. 2000 hr

Customer

Integration Vehicle Management System &


Warranty
VMS Actionhandling

Create
Equipment

Assign
Measuring
Points

Assign
Master
Warranty

Create Warranty Objects

for this vehicle


(VIN XY123456)
Equipment
Measuring Points
Master Warranty

Integration Warranty in VMS in 4.6c


Actions for creation of measuring points, master warranty, equipment

Vehicle

Create
equipment
CREQ

Assign
Measur.- Points
MEAS

Assign
Master warranty
WRTY

Create Equipment
for vehicle by template
Master Equipment
Assignment of MeasuringPoints to Equipment
(e.g., milage, operation hours)
Define Warranty Type
by template
Master Warranty

Integration Warranty in VMS since 4.71


Introducing the General Object Number

Vehicle

Create General
Object Number
GEOB