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Detering Consulting SAP Supplier Cost Recovery

Delivering Business Benefits

Fully Integrated Supplier Cost Recovery

Learn How Our SAP Automotive Supplier Recovery Solutions Offers You a Fully Integrated, Powerful SAP Based Supplier Recovery Process.

Our SAP S/4 HANA Supplier Recovery Solution provides an end-to-end solution for supplier recovery processes.

  • Provides Higher Customer Satisfaction
  • Integrates ALL of the Various Parts of Your Business.
  • Provides Vertical and Horizontal Business Process Integration
  • Provides Automotive Dealerships, Distributors and OEMs and their suppliers a seamless, integrated mechanism to process claims and ensure full supplier recovery takes place.
A Proven Supplier Recovery Solution

Get The Detering Consulting Supplier Recovery Solution Brief

Find Out What Makes Our Solution Unique

Our SAP ACS Supplier Recovery Implementation Covers a Wide Array of Business Processes - Implementing an effective Supplier Recovery process is a key to dealer business excellence and improved profitability:

  • Learn About the SAP Supplier Recovery Software Out-of-the-Box Functionality
  • Discover Why it Uses SAP Fiori/UI5
  • Understand the Key Value Differentiators
  • See How Integrated Holistic Analytics Delivers 'in the now' Insight.

The information on this page is in-depth and many people need time to read it at a later date.

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Download The SAP Supplier Recovery Solution Guide

SAP Supplier Recovery Solution Overview Page

Supplier Recovery Definition Business Benefits of Supplier Recovery Supplier Recovery Processes Supplier Recovery Specialist Supplier Recovery Financials Reporting Fleet Supplier Recovery Importance of Preventative Maintenance SAP Fiori Interface Supplier Recovery System Implementation Trading Scenario

Supplier Recovery Definition

Supplier recovery claims are claims made by the manufacturer to the supplier for reimbursement for the warranty-related costs that are associated with a warranty claim or work order when the cause of the defect was a supplied part.

Supplier recovery claims can also be made by dealerships against OEMs.  If possible, the OEM will make a claim against a supplier, but if the OEM 'owns' the part, they themselves will make things right.


Get the SAP Supplier Recovery Overview Presentation

Business Benefits of Supplier Recovery

Detering Consulting's SAP ACS Warranty Management based solution to Supplier Recovery provides:


  • Automatic reimburser determination using material vendor determination
  • An Out-of-the-Box completely modeled supplier recovery business process
  • VSR checks for applicability of the claim for supplier recovery

Robust Modeling

  • The supplier-facing process is modeled in a second action matrix, complete with its own claim status and available actions
  • Supplier recovery can be started independently of the status of processing towards the dealer
  • Dependencies between both sub-processes can easily be modeled

Comprehensive Functionality

  • Data conversion (material numbers, local parts, …)
  • Item types can be added, converted to standard values or deleted for recovery
  • Supplier communication via EDI, email, portal or paper 
  • Processing of supplier answers that cover multiple claims
  • Appeal process
Read More About The Benefits  Of SAP ACS Supplier Recovery

Supplier Recovery Systems

Supplier Recovery Process Flow

Starting The Recovery Process

Step 1

Supplier Recovery is started be creating an OV-outgoing version towards the supplier

  • The supplier recovery process is treated independently from the dealer process: The warranty claim is enhanced with a secondary supplier recovery status and the possibility to define an independent process
  • Material numbers which are not known to the supplier (locally bought parts) are converted to sublets
  • Rules can be defined which item types are copied to the OV-version
  • Pricing for materials is based on purchasing contract, source list, or purchasing info record prices from the supplier
  • Labor rates can either be passed to the supplier 1:1, or by using an agreed standard labor rate
  • Sublet items are transferred 1:1 to the outgoing vendor claim version 
  • Manual reductions of prices are taken into consideration

Checking the claim before sending

Step 2

Checks are performed on the vendor claim to make sure no syntactical errors are done, for example:

  • Mandatory fields for recovery
  • Checking of submission deadline
  • Check if parts need to be returned to vendor
  • The Framework for these checks is based on the ACS for Automatic Claim Validation

Authorization Request

Optionally, before repairs are started, an authorization request can be submitted to the supplier, a response recorded on the authorization and notification. Following find a snapshot of an Authorization Request PDF which is populated with the SR case data, and is emailed automatically to the supplier:

SR Supplier Recovery Authorization Form SAP


Sending of Claim Request (OV - Version)

Step 3

  • The claim is submitted to the supplier. This can be done via EDI (using the standard SAP IDoc for Warranty) or by printing out a form
  • Defective parts can be delivered to the supplier via a delivery free-of-charge. The delivery is created via an action in the claim automatically. The delivery output forms, PDF, email, etc. are re-used from sales and distribution module, i.e. can be leveraged without having to set up the forms  again on the warranty side
  • A to-be-expected IV - inbound vendor response version is created and waits to be updated when the decision from the supplier is received

Receipt of Decision From Supplier

Step 4

  • The decision on the claim is received
  • Current business practice is often that the supplier will not send EDI-messages, but a collective credit memo on paper, or via unstructured email
  • The decisions are entered into the claims, and values for the claims are distributed via a special transaction, and the credit is posted in FI/CO
  • If no appeal is necessary, the supplier recovery process is closed

Appeal / Reversal of Claim Decision

Step 5


  • To appeal the decision from the supplier, a new OV-version can be created
  • The basis for that OV-version is the last IV-version
  • The process of resubmitting the claim and receiving the result is identical to the first OV-version



Learn More About Using  the SAP Supplier Recovery Solution

Supplier Recovery Specialist

Key To Effective Supplier Recovery Operations

A Solution Developed by Cost Recovery Consultants

Your supplier recovery SAP system is a key element of taking full advantage of the Supplier Recovery process.  But the role of the Supplier Recovery Specialist can be considered the lynchpin to success.

What They Do

The short answer is they increase your profitability.  They do this by shifting cost of poor quality to where the defective product was made.  In order to do this, they have to have both vast knowledge of what you

  • Sell and
  • Buy, in terms of what the contractual agreement about vendor warranty says in detail, as well as
  • Expert level knowledge of how your Supplier Recovery IT system works.

This means they have expert level knowledge and ability with our SAP Supplier Recovery System, which is based on

  • SAP Service and Plant Maintenance
  • SAP Warranty (LO-WTY)  with the ACS add-on 
  • and other modules that are also utilized are SAP QM, MM, SD, FICO - Finance  

When it comes to what they do, the primary activity is

  • recognizing when a product is subject to supplier recovery actions.  Parts do not automatically get put into the supplier process, although we can devise a capability to do that in SAP.  A specialist typically has to make the initial determination.  As well, the supplier themselves have specialists, that have to adjudicate such claims, and between the two of them, come to an agreement as to what can be claimed and for how much
  • in that lies the crux of the matter, as a supplier recovery specialist you know what your vendor is looking for. We make that 'soft' knowledge available to the upfront processes that are typically carried out by folks who have customer-facing or operational turn-around questions on top of their minds

The IT system plays a crucial role in this flow of information and ultimately, cash.

Supplier Recovery Financials Reporting

SAP Supplier Cost Recovery Analytics

SAP Supplier Cost Recovery requires advanced reporting.  Supplier Recovery reporting can be set up for each the major business stakeholder levels:

Level Toolset Comment
Operational S/4 HANA
  • Warranty Workbench, 
  • Add-on Reports 
Managerial S/4 Hana and BW, Dashboarding, several tools including SAP Cloud Analytics, SAP BW, Power BI, MS Analysis, Tableau, Cognos, Hadoop, others 
  • Data mining
  • Big data tools, 
Executive  BW and Dashboards  


Below you can see a sample report from the operational level. 

Example Supplier Cost Recovery Financial Operational Report

It is easy to produce a Supplier Recovery claim report out of SAP S/4 or ECC using the SAP Warranty Workbench.

This looks like an easy excel-like report but there are many things you can do with it. 

Your Supplier Recovery Analysts or claims specialist can use this as a daily work queue. Report rows can be grouped, totaled, printed or exported to Excel.  Also recovery prices are summarized per claim for parts, labor, and other items, with the ability to compare requested vs. approved recovery.  

There is a integrated chat function within the tool to chat with the supplier. 

There is a lot more you can do within the workbench:  You can trigger actions on each or several claims, for example release debit documents, or progress the claim to a next step. An action can run in the foreground or as a batch job in the background.

Many of your suppliers may require a list of claims from you on a periodic basis, such as monthly.  To do this in SAP Supplier Recovery, you use what is called 'Collective Claims".  Collective claims is an optional package within the SAP ACS Warranty Claims Management add-on solution.  Collective claims can be created from the workbench, allowing you to select a list of claims that will get a collective claim created for. And debited only once instead of on each claim. 


Supplier Recovery Financial operational reportSupplier Recovery Claims Processing Report

Read on in our Supplier Recovery blog!

Supplier Recovery in SAP is about cost recovery and the process for managing recovery. Sometimes a vendor may require us to send back the broken unit, sometimes called a Core, which requires reverse logistics processes to be tied to a SR - Supplier Recovery claim. This is the Vendor RMA process, and the ARM - Advanced Returns Management capability in S/4 Hana incorporates much of the functionality to tie these two processes together.


Fleet Supplier Recovery

When it comes to fleet operators, who operate vast fleets of capital intensive equipment, recovering every dollar due from a supplier is one of the keys to profitable operations.

With the ever improving quality of vehicles, fleet operators have been able to push out the mileages they typically operate their fleet vehicles.  In 2019, the year prior to the pandemic, those average mileage numbers had risen to 80,000 miles and are being pushed ever higher due to rising quality.  

Accurate Maintenance Records Essential

Of course, in order for OEMs to offer ever longer powertrain warranties, they expect fleet operators to not only perform all manufacturer specified services, but to keep documentation on them accurate and up-to-date.  

The Payoff

Approximately 35% of an asset’s total lifecycle cost occurs in the last 15% of life – you want to decrease this period, not extend it.  That's why a vehicle fleet that is modeled and maintained within an SAP environment offers such powerful financial benefits to fleet operators.  It means they have a robust, yet simple system for acquiring an asset, operating that asset and ultimately, using predictive analytics as to when to retire that asset from the fleet to fully optimize asset lifecycle cost.


Importance of Preventative Maintenance

Though you can and should be aggressive with recovery what you are owed by suppliers, vendors, both OEMs and their suppliers expect you to meet strict criteria, particularly when it comes to preventive maintenance.

That's why it is critical that you both know what the manufacturers specified operating parameters are of your equipment but as well, know, follow, and document your preventive maintenance activities on every piece of equipment.

Whether you are referring to an automobile owned by an individual or by a fleet of vehicles operated by a business, OEMs have continuously demonstrated a willingness to push back on claims when you are not meeting your preventive maintenance commitments.

This doesn't just apply to automobiles and fleets.  It applies to all types of equipment, such as Bull Dozers, Excavators, Cranes, and other large, complex pieces of equipment. 

The equivalent of preventative maintenance in the automotive world can be viewed as self-health-checks in the high tech industry.


Read More About The Benefits  Of Preventive Maintenance

SAP Fiori Interface

The SAP ACS Warranty Management System is a proven approach to implementing advanced Supplier Recovery Functionality within any business. 

Simplicity Makes It Powerful

Because the front end is based on the advanced SAP Fiori User Interface, users find it invitingly simple to use.   But the powerful user interface isn't just better looking.  It represents an advanced software usability engineering designed to make users happier and more productive.

While displaying a simpler, more inviting user interface, it still retains support for the complex business processes that SAP supports, especially with regards to Supplier Recovery processes.


Third Party Access

One of the more complex but highly necessary aspects of the SAP Supplier Recovery System is the need to allow access to business partners outside the four walls of the system.  This means granting third party access to the relevant part of the system. 

Screen Shot 2021-04-04 at 4.29.25 PM

Without this 3rd party access, suppliers would consume a license on your system, which would be very costly, as well as technically challenging.  Instead, using both the Supplier Recovery capabilities of SAP ACS Warranty Management, suppliers are granted the required access to carry out their part of their supplier recovery process.  Much of this interaction is carried out via electronic interfaces, such as EDI, XML and iDOCs, meaning it is system agnostic as far as supplier systems.

Supplier Recovery System Implementation

Implementing the SAP Supplier Recovery System is a speciality of Detering Consulting.  Using our proven experience from past projects, we have developed a simple four step implementation process:

  • Assessment
  • Diagnosis
  • Implementation
  • Analysis

Assessment:  During the assessment phase, we conduct a series of highly structure interviews to determine your current 'As Is' status.  We also begin the critical process of developing the business case to justify your implementation investment.

Diagnosis:  During the diagnosis phase, we synthesize the information we gathered during the structured assessment phase and develop an implementation plan, including expected cost, duration and required risk mitigation efforts.  Our Senior SAP Certified Project Management experts vet every step of the plan to ensure it's feasibility, cost, and assumptions are all correct.

Implementation:  During the implementation phase, we configure and deliver your working solution.  Already in the beginning of the implementation phase, you will have processed a supplier recovery claim completely, all the way to seeing the financials settled in your system.

Analysis:  During the post Go-Live Support phase, we combine your typical activities of any IT post Go-Live with a deep dive into your operating results from the new system.  Analytics are then used to continuously improve your system and deliver ever increasing business benefits.

Trading Scenario

SAP Trading Scenarios: From Claim Creation to Vendor Replacements

In the complex world of warranty operations, efficiently managing claims and handling vendor part replacements are crucial tasks for Original Equipment Manufacturers (OEMs) and organizations such as metro and train operators, minors, and Oil & Gas companies. Navigating these processes within SAP can be challenging, but mastering them ensures smoother operations and improved supplier relationships.

Here we provide an overview of SAP's trading scenarios, aka RIK - Replacement-In-Kind, focusing on the entire lifecycle of a claim—from its creation to the final replacement of parts. By understanding these essential steps, warranty managers and procurement specialists can enhance their claim management efficiency, reduce processing times, and ensure that all parties involved are kept satisfied. 

Navigating Through the SAP Trading Scenario Process

The following sequence of steps provides a guide for executing SAP's Replacement-In-Kind scenario. Within the SAP ecosystem, this process is referred to as RIK, which stands for Replacement in Kind, though it's also commonly recognized by customers as the "Trading Scenario".

The key steps include creating a claim, processing it, and handling the return and replacement of parts with the vendor. Here is a detailed breakdown:

  1. Creating a Claim:
    • Start by creating a part claim. There may be labor, misc., or travel also present on the claim.
  2. Initial Processing:
    • The claim goes through business rules checks (VSR).
    • Ensure the ALV layout includes the material document, year, and item decision code in its field list
    • Continue Processing
  3. Decide to invoke the Trading Scenario
    • Invoke the trading scenario by choosing "Return part to vendor" from the part disposition popup: 
      Invoke Trading Scenario
      Claim popup requesting part disposition decision, setting the trading scenario

      In this Replacement-In-Kind process, the item's valuation is adjusted to $0.00, reflecting its transition to a no-cost replacement.

  4. Outbound Part Shipment and Confirmation:
    • After the warehouse ships the part to the vendor, a new claim statement is submitted to the vendor as an FYI.
    • The part shipment material document, for example via movement type 904, is saved to the claim via document flow. 
  5. Receiving Inbound Replacement Part:
    • When the vendor ships the replacement part, process the receipt by updating the claim.

    • The inbound vendor shipment is transacted through the claim, by creating a new material document, for example via movement type 952, is also saved to the claim via document flow. 
    • The item's decision code is automatically updated to reflect the vendor part is received. This confirms the part pricing condition value at $0.00
    • The system automatically updates the part's return status to "C - Shipped," seamlessly tracking its journey back from the vendor.
  6. Final Processing:
    • Continue processing to progress the claim to it's final completion status, for example, S700 - Claim Paid by Supplier and ensure the FICO document is not created.This represents the crowning success of the trading scenario: It acknowledges the part's return under the RIK protocol, effectively averting any financial deductions from the vendor's account.
    • Having said that, in certain situations, while the part itself has been replaced, charges for labor, miscellaneous services, and so forth, may still require billing to the vendor. Under these circumstances, it's essential that SAP recognizes the costs associated with these non-part elements are accurately transferred to the financial records.

      There you have it, the SAP Warranty Claim Trading Scenario. 



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