Efficient used and core part processing

Used and core part handling and valuation at an automotive supplier

Collecting, valuing, and tax-related handling of used and core parts, as well as returning them to suppliers often presents companies with major logistical challenges. How a highly automated solution can be successfully integrated into a company-wide ERP system while speeding up the processing methods is shown in the example of the automotive supplier TROST SE.

The challenge

An automotive supplier wants to identify and process used and core parts returned by customers quicker and more efficiently. Used part stocks should be managed in inventories together with their values, which differ from the original values. This should also be done in compliance with the applicable tax requirements. The new system must also create the conditions for a more compact process of returning used parts to manufacturers and suppliers. A method of processing sales with differentiated sales prices should be enabled for core parts (sales deposit = purchasing deposit).

The solution

Processing the returns was implemented using the Advanced Returns Management business function from SAP as an integral part of the company-wide SAP system throughout all stores and warehouses. KPS adapted the system specifically to the special features of conditions regarding residual values for automotive core and used parts. The Advanced Returns Management business function went live after just a few months.

In the Advanced Returns Management system, all used parts are managed with unique part numbers and linked to the new parts via a parts list. Used parts have their own tax codes and are selected via the new parts numbers. Prices and values are managed according to different conditions, and the used part value matches the valuation of the used part itself. The deposit value conditions are used by purchasing and sales. The advanced returns management approach allows the collection of used parts and their return to manufacturers and suppliers to be processed in the same way as normal vendor returns.

The customer benefit

The Advanced Returns Management functionality enables full transparency of used part stocks in all the stores and warehouses. It also allows inventories to be accurately valued as well as new and used parts to be processed in compliance with tax requirements on invoices and when handling vendor returns. Purchase and sales prices of used and core parts are linked to condition values. Customer returns are automatically allocated to the vendor returns.