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Warranty Claim Management in SAP

Introduction:
Warranty management in SAP plays a crucial role across industries since it allows automatic tracking of product/services under warranty period and as well re-imbursement of claim expenses with in validity. This document would provide brief about Warranty Management features available in SAP and related technical configuration to implement Warranty Management solution in SAP.
Scope of Warranty Management Solution in SAP:
SAP Warranty management considers following aspects:
  • It identifies the products/services under warranty
  • Validate the authenticity of warranty claims
  • Validates whether the product/service issue highlighted by customer falls under warranty
  • Define the effects of warranties on pricing & invoicing
  • Monitor expenses incurred under due to warranty issues
Warranty Process Flow:
For reference purpose, if we consider automotive industry, a warranty claim will occur when a repair is being carried out on a vehicle or for a return of a defective part (from dealer stock or sold and returned to the dealership).  Usually, Vehicle repairs are for vehicles owned by retail customers and are for vehicles under active warranty.  The dealer who carries out the repair will create a warranty claim.  The warranty claim will be checked by warranty assessor and will be reimbursed for the labour and/or material and/or sublet expense. Here is the basic example of business process cycle where an automotive part should pass though when it comes for warranty claims.
  1. Vehicle Consumer come into dealership
  2. Dealer determines if product/service defect is under valid warranty
  3. If yes, dealer files warranty claim
  4. Warranty assessors may review claim for accuracy
  5. Claim is either approved or rejected
  6. If approved, claim is processed through to Finance and dealer is reimbursed
Configuration Steps to Implement Warranty Management Solution in SAP: 
Primary focus of this document is about configuration guide for Warranty Management solution in SAP. Similar to SPRO, all warranty related configuration can be carried out via transaction OWTY.
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Following step-by-step configuration to be carried out for warranty claim management in
SAP: 
  1. Define Warranty Claim Type
  2. Assign Number Range for Claim Type
  3. Define Decision Codes
  4. Define Pricing for warranty claim
  5. Maintain Pricing Condition Records
  6. Define Action Matrix for Claim Processing
  7. Define GL Account Determination Procedure for Claim Processing
  8. Assign Pricing, action matrix and GL Account Determination Procedure to Claim Type
  9. Implement Validation/Substitution for claims (Optional)
  10. Define Output Determination for claim credit note 
  11. Maintain Output Condition Records
Each step is explained in detail in below section:
1. Define Warranty Claim Type
Based on business requirement different type of claims can be configured. Refer following
path for configuring the same.
OWTY ==> Warranty Claim Processing ==> Define Warranty Claim Types.
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2. Assign Number Range for Claim Type
Similar to other Sales Documents, number range to be assigned for warranty claim document. Refer following path for configuring the same.
OWTY ==> Warranty Claim ==> Processing ==> Define Number Ranges for Warranty Claims.
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Create a Group for assigning Number Range:
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Assign Claim Type to the Group:
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3. Define Decision Codes
Decision codes are used to attach status code based on different action done on those claims. E.g. once claim is approved, decision code XX – Accepted can be attached to the claim.
To define decision codes, refer following configuration path.
OWTY ==> Warranty Claim ==> Processing ==> Warranty Claim ==> Define Decision Codes.
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4. Define Pricing for warranty claim
Every warranty claim should have a pricing structure to determine how much value to be reimbursed to dealer when product/service to be repaired within warranty period promised by the company. Similar to configuration of pricing procedure (e.g. definition of access sequence, condition type, pricing procedure etc.) in the area of Sales and Distribution, warranty pricing procedure configuration
follows the same process.
To define pricing, refer following configuration path.
OWTY ==> Warranty Claim Processing ==> Pricing.
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Example: Warranty pricing procedure WT0002 available from Standard SAP.
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5. Maintain Pricing Condition Records

Similar to SD pricing condition records, warranty pricing condition records can be maintained via Transaction WYP1/WYP2/WYP3. To maintain conditions records

Please refer following SAP menu path.

SAP Menu ==> Logistics ==> Customer Service ==> Service Agreements ==> Warranty Claim Processing à Master Data ==>Condition Records for Pricing.

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6. Define Action Matrix for Claim Processing

Action Matrix is a consolidated matrix of different actions/activities which can be carried out to a claim document at any given moment of time and also the consequences once any action is executed. Action matrix primarily consists of different actions and related status to it. Refer details about Action and Processing Status as mentioned below.

Action:

Every action does some processing and the processing logic is written is related Function Module attached to it. For example, standard action T041 has been defined as Elementary Action and Function Module WTY04_OC_POST_AC has been attached which would help to post credit memo for the claim amount.

To define action, follow below configuration path.

OWTY ==> Warranty Claim Processing ==> Control Data ==> Processing Control ==> Define Actions.

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Refer Attached Function Module:

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Processing Status:

After every action, claim gets a new status to identify every stage of the warranty claim. During definition of Action Matrix, these statuses would be used.

To define status, follow below configuration path.

OWTY ==> Warranty Claim Processing ==> Control Data ==> Processing Control ==> Define Processing Statuses.

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Action Matrix:

Once Action and Processing Statuses are defined, action matrix can defined based on business requirement. This matrix would suggest what all activities (Claim Check, Claim Approval, Claim Reject etc.) can be done on a particular warranty claim and after completion of those action what would happen to the same claim document.

To define action matrix, please following below configuration path.

OWTY ==> Warranty Claim Processing ==> Control Data Processing Control ==> Define Action Controls.

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Example of Standard Action Matrix is AP02.

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Above given example (highlighted row), matrix suggests that for a claim document we can perform action T060 (via attached Function Module to it) only if the claim status is B002 and once we complete action T060, claim would have status B060.

7. Define GL Account Determination Procedure for Claim Processing

Every warranty claim should have account determination procedure attached to it to determine right GL account for posting claim expenses. Similar to configuration of Revenue Account Determination Procedure (e.g. definition of access sequence, condition type,
pricing procedure etc.) in the area of Finance, warranty GL Configuration procedure follows the same process.

To define GL determination procedure, refer following configuration path.

OWTY ==> Warranty Claim Processing ==> Revenue Account ==>Determination.

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Example of Standard GL Determination procedure is KOFI00.

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8. Assign Pricing, Action matrix and GL Account Determination Procedure to Claim Type

Pricing Procedure, Action Matrix and GL Account Determination procedure can be assigned to a claim type. To assign pricing procedure, action matrix and GL determination procedure, refer following configuration path.

OWTY ==> Warranty Claim Processing ==> Define Warranty Claim Types.

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9. Implement Validation/Substitution for claims (Optional)

Validation and Substitution rules are similar functionality as available in the area of Finance. During warranty claim processing, if there is any business requirement to perform certain validation OR to substitute certain values as requested by business, these rules can be
implemented.

Implementation of Validation & Substitution is exactly similar to the functionality available in Finance Area. To implement validation and substitution please refer following configuration path.

OWTY ==> Warranty Claim Processing ==> Control Data ==> VSR Checks.

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10. Define Output Determination for claim credit note

In case business has requirement to have an output (Print/Mail) for warranty credit notes, output determination procedure needs to be configure similar to output determination in SD area.  Only difference here is, output type is assigned to FI documents generated for the claim. To implement output/message determination for warranty please refer following configuration path.

OWTY ==> Warranty Claim Processing ==> Message Determination.

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11. Maintain Output Condition Records

Similar to SD output condition records, warranty message condition records can be maintained via Transaction WYN1/WYN2/WYN3. To
maintain conditions records please refer following SAP menu path.

SAP Menu ==> Logistics ==> Customer Service ==> Service Agreements ==> Warranty Claim ==> Processing ==> Master Data ==>
Condition Records for Message Determination.

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