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Cost Recovery Consulting Service Offering

    Cost Recovery Consulting 

    Service Overview

    Our Cost Recovery Consulting service empowers OEMs and manufacturers to recover the maximum possible value from their suppliers for defective or non-compliant parts. Leveraging the SAP ACS Warranty Management solution — SAP's premier warranty platform — we implement structured, data-driven processes that optimize the supplier recovery lifecycle. From claim identification to supplier reimbursement, we help you turn warranty failures into financial wins. 

    Note: According to Warranty Week, about 30% of recoverable cost are never recovered.  

     Core Service Components

    1. Warranty & Supplier Recovery Process Optimization.
      ✓ Streamline and automate automated supplier recovery workflows.
      ✓ Align process logic with real-world defect and return scenarios.

    2. SAP ACS Warranty System Configuration.
      ✓ Configure and optimize SAP WTY (LO-WTY) + ACS for supplier recovery. 
      ✓ Customize warranty object categories, claim types, and statuses.

    3. Supplier Contract & Policy Integration.
      ✓ Map commercial terms into SAP ACS logic.
      ✓ Ensure contract traceability for every claim.

    4. Claim Validation via Data Intelligence.
      ✓ Use service history, inspections, and defect data for validation.
      ✓ Enable audit-friendly, rule-based automation.

    5. Analytics & Recovery KPIs.
      ✓ Recovery Rate (%), Cycle Time, Claims Value Recovered.
      ✓ SAP Embedded Analytics and SAP Cloud Analytics dashboards available.

    6. Governance & Training.
      ✓ Set up program governance and escalation paths.
      ✓ Train warranty, procurement, and operations teams.

    Who We Serve

    • OEMs & Tier 1 Suppliers
      (Auto, Aerospace, Medical, Transportation, Heavy Equipment industries )
    • Enterprises running or migrating to SAP S/4HANA 
    • Organizations with significant warranty cost exposure

    Value Delivered

    • Increase supplier recovery revenues by possibly 3–5x: 
      Project pays for itself --> Short ROI
    • Reduce manual claim processing by up to 70%
    • Improve negotiation leverage and supplier accountability
    • Enhance compliance and traceability with audit-ready data

    Ready to Turn Warranty Costs Into Supplier Credits?
    Reach out to explore how our SAP cost recovery solution approach can unlock millions in cost recovery and provide valuable financial resources!

    Complete the form to take next steps!

     

    Cost Recovery Consulting FAQs

    OUR FREQUENTLY ASKED QUESTIONS

    Supplier recovery solutions are automated, AI-drive systems and processes designed for manufacturers (OEMs) to reclaim costs for defective, failed, or warranty-covered parts from suppliers.  These solutions improve financial recovery percentages, enhance supplier accountability, and improve supply chain efficiency by streamlining claim creation, validation, and resolution.

    Key Features and Capabilities:

     

    SAP-powered cost recovery consulting involves specialized services that leverage SAP software—particularly modules like Supplier Recovery (SR), Advanced Returns Management (ARM), to automate and maximize the recovery of expenses, warranty claims, and vendor rebates. These consultants analyze, configure, and optimize SAP systems to identify "missed money," such as un-reclaimed warranty costs from suppliers or uncollected rebates, directly within the enterprise resource planning (ERP) environment.
    Key Aspects of SAP-Powered Cost Recovery Consulting:
    • Automating Warranty Claims: Consultants implement SAP ACS Warranty Management to automate the entire lifecycle, from detecting a failure to filing a claim and booking the financial posting, significantly speeding up the recovery of lost revenue.
    • Supplier Accountability & Recovery: The consulting process involves setting up systems that track vendor performance, ensuring that suppliers pay for defective parts or failed services. This often includes reverse logistics (handling cores/returns) to maximize supplier reimbursements.
    • Rebate and Chargeback Optimization: Specialists configure tools to track purchasing rebates, quantity-based discounts, and vendor funding programs, ensuring that all owed rebate income is fully collected.
    • Process Improvement with Data Analytics: Consultants use tools like SAP Signavio Process Intelligence and SAP Fiori to analyze transactional data, identify inefficiencies (e.g., invoices that skipped approval), and uncover financial leakage.
    • Integration with Core Systems: The solutions are typically integrated into SAP S/4HANA or SAP ECC systems, allowing for real-time visibility into transactions, claims status, and vendor interactions.
    Benefits of This Type of Consulting:
    • Faster Revenue Recovery: Automated claims, such as those implemented by Detering Consulting for clients, lead to quicker financial settlements.
    • Reduced Financial Losses: By identifying un-claimed warranty and vendor incentives, companies reduce their total cost of ownership and increase profitability.
    • Improved Efficiency: Moving from manual, fragmented processes to an automated SAP environment reduces human error and boosts productivity.
    This specialized consulting is crucial for asset-intensive industries (e.g., automotive, manufacturing, transportation) that experience high volumes of repairs and supplier interactions.

     

    Implementing SAP Supplier Recovery (specifically within SAP Warranty Management or SAP ACS Warranty Management) can significantly improve the amount of warranty costs recovered from suppliers, with some programs estimating that supplier responsibility for warranty costs can be increased to up to 30% of total warranty claims. By automating the recovery process, companies can, in some cases, achieve substantial increases in recovery rates and reduce claim cycle times by over 40%.

    Key Recovery Areas and Benefits

    • Warranty Costs: The primary focus is recovering costs for defective materials or parts from suppliers, reducing the overall financial burden of warranty repairs on the manufacturer.
    • Working Capital: Tighter contract compliance and improved procurement processes within SAP can unlock $5M–$15M in working capital recovery.
    • VAT Recovery: SAP Concur enables the recovery of VAT on vendor invoices, including historical receipts.
    • Key Process Improvements:
      • Automation: Reduces manual effort in tracking and filing claims by roughly 80%.
      • Transparency: Provides shared dashboards with suppliers, reducing disputes and accelerating the approval of claims.
      • Accuracy: Reduces overpayments and ensures that contractual agreements are accurately applied.

    Impact on Key Performance Indicators (KPIs)

    • Recovery Rate: Substantially increased through data-driven and automated claims management.
    • Claim Cycle Time: Reduction of over 40% in processing time.
    • Supplier Accountability: High adoption of supplier scorecards (up to 98%) helps enforce accountability.

    For maximum effectiveness, the solution should be fully integrated into the SAP ERP system, such as SAP S/4HANA, to allow for seamless interaction between procurement, quality management, and finance.

    Your particular results depend on your current processing volumes.  Before every engagement, we do a deep dive analysis to set targets using your actual data.

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