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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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      36 Comments
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      Author's profile photo Hidayathulla Hasan
      Hidayathulla Hasan

      Excellent uttam!!!!



      This was my much awaited topic in EAM on SCN.

      I searched on this topic on different forums but couldn't serve my purpose.

      Bookmarked and liked.





      Thank$

      Hidayath

      Author's profile photo Jogeswara Rao K
      Jogeswara Rao K

      Very Good Documentation Uttam !

      Author's profile photo Former Member
      Former Member
      Blog Post Author

      Thanks You.

      Author's profile photo vemuri santosh kumar
      vemuri santosh kumar

      Thank you for sharing this document

      Author's profile photo Former Member
      Former Member

      Good One

      Author's profile photo Navaneetha Krishnan
      Navaneetha Krishnan

      Hi Uttam,

      Pretty good document for configuring the basic Warranty processing.

      To my knowledge we use the concept of actions and action matrix only in IS-Auto.

      So I have some queries, if you can help me to understanding these things, i will be very happy.

      1. Is the warranty processing be used in other kind of industries (consumer durables) using the concept of actions and action matrices.

      2. Also can you just post the sequence of transactions we have to do once these configurations are done (like warranty order ....etc) so that we can understanding how the business process makes use of this configuration.

      Thanks in advance for this.

      Author's profile photo Former Member
      Former Member
      Blog Post Author

      Hi Navaneetha,

      I have worked on this topic for AUTO domain only.For AUTO domain, we have used Object as VELO but there are other options/objects available like Equipment, Functional Location. I would suggest to explore these option which are related consumer durable.

      Regarding Transactions, for warranty claim its only Claim creation and then through action matrix customer gets created directly into Finance though FI Credit Memo.

      I am not if I have answered your queries. Please let me know if you need further details.

      Best Regards

      Uttam Palui

      Author's profile photo Navaneetha Krishnan
      Navaneetha Krishnan

      Thanks for updating Uttam.

      Author's profile photo Chintan Budhbhatti
      Chintan Budhbhatti

      Uttam Palui,

      Awesome document....very nicely explained.....

      Need to configure on my IDES......

      Great work....Thumps up!!!!

      Chin2.

      Author's profile photo Former Member
      Former Member
      Blog Post Author

      Thanks Chintan

      Author's profile photo Lokesh Ojha
      Lokesh Ojha

      thanks for docx uttam ...really gr8 wrk.....

      Author's profile photo Former Member
      Former Member
      Blog Post Author

      Thanks Lokesh

      Author's profile photo Former Member
      Former Member

      Nicely written document Uttam!!!! you explained the processes thoroughly!!!!

      Author's profile photo Rahul Prakash
      Rahul Prakash

      Good work Uttam...

      Regards,

      Rahul

      Author's profile photo Former Member
      Former Member
      Blog Post Author

      Thanks Rahul.

      Author's profile photo Arvind Pereira
      Arvind Pereira

      Hi Uttam,

      You have covered features in SAP along with related technical configuration to implement Warranty Management solution, good work for EAM.

      thanks

      Arvind Leo Pereira

      Author's profile photo Former Member
      Former Member
      Blog Post Author

      Thanks Arvind.

      Author's profile photo Kashi Yadaram
      Kashi Yadaram

      Excellent explanation! liked your approach of explaining from business scenario through configuration.

      Author's profile photo Former Member
      Former Member
      Blog Post Author

      Thanks Kashi

      Author's profile photo Caetano Almeida
      Caetano Almeida

      Nice document. Thanks for sharing!

      Author's profile photo Former Member
      Former Member
      Blog Post Author

      Thanks Caetano.

      Regards

      Uttam

      Author's profile photo Former Member
      Former Member

      Hi Uttam,

      Thank you for sharing such an informative document.

      I am interested in doing traning in SAP For Auotmotive. Please suggest me to go further in this....

      Regards,

      Vivek.

      Author's profile photo Former Member
      Former Member
      Blog Post Author

      Thanks Vivek.

      Please try exploring VMS node under Logistics Execution. This is used  by Automotive Industry.

      Regards

      Uttam

      Author's profile photo Anand Rao
      Anand Rao

      Hi Uttam_Very good document! It covers both conceptual explanation and configuration guidelines!

      Author's profile photo Former Member
      Former Member
      Blog Post Author

      Thanks Anand.

      Regards

      Uttam

      Author's profile photo Ravi Prakash
      Ravi Prakash

      Good documentation Uttam.

      Author's profile photo Former Member
      Former Member
      Blog Post Author

      Thanks Ravi.

      Regards

      Uttam

      Author's profile photo Former Member
      Former Member

      Nice document, Uttam.

      Can you tell me if it's possible to use any of the Warranty Claim functionality if you're not using CS/SD and just have PM configured? For example, if I want to return a purchased item that has broken under warranty to the vendor. I've read that the Warranty Claim can be used for a vendor warranty, but it still seems like the process is customer-centric and CS is needed for this.

      Any advice? Thanks!

      Paul

      Author's profile photo Former Member
      Former Member
      Blog Post Author

      Hi Paul,

      I have NOT explored that area but if you try creating claim using standard SAP configuration, you can see that you can manage claims attaching to Equipment/Functional Location etc. I would suggest please explore that option.

      I have used Vehicle Object for my case. Hope it helps.

      Regards

      Uttam Palui

      Author's profile photo Former Member
      Former Member

      Very Good document.

      Thanks for sharing.

      Author's profile photo Gibson Nyarugwe
      Gibson Nyarugwe

      Hello Experts

      I saw this document highly valuable, can someone kindly provide how can claims management be done on the side of the customer, say in the automobile example given above, the EAM or PM a part got damaged and still covered under the warrant or guarantee.

      Can this be triggered on the equipment being maintained, how can this be loaded to avoid the customer going to a new supplier where they supposed to approach the supplier, how can alerts be generated in the SAP system?

      Regards

      Gibson

      Author's profile photo Former Member
      Former Member

      Is LO-WTY just for automotive business? 

      Author's profile photo Former Member
      Former Member

      Hi Uttam Palui,

      Appreciate your efforts for sharing valuable information.

      I shall be thankful to you if could share any implementation /roll out Questionnaire available for warranty service.

      Thanks in advance.

       

      Warm Regards

      Nataraju

       

       

      Author's profile photo Loganathan Balakrishnan
      Loganathan Balakrishnan

      Hi Uttam !!

      very good and detailed presentation on the Warranty and very useful for PM/EAM module.

      Thanks!! for the documents.

      Loganathan Balakrishnan

      Author's profile photo Sanjay Pattnaik
      Sanjay Pattnaik

      Hi Uttam,

      Can you please help on how the SAP PM Order Labor & Material Cost can be copied into Claim document. We could generate Claim on Work Order Completion but the labor & parts cost not flowing to claim.

      Author's profile photo Ivan Lira
      Ivan Lira

      Thank you for sharing this important and useful document.