Customer Complaint Processing

6.1.12.1 Receipt of Customer Complaint

Following types of Customer complaints should be maintained in the Sap system:

1. Quality Problem 2. Shortages in Delivery 3. Excess in Delivery

4. Material Damage in Transit 5. Logistics – Not as per PO terms

Complaint should be entered on the sold to party;

The liability and the credit should be given to the payer of that invoice which is referenced to a complaint.

 Customer Code – by referencing the packet number /coil no / invoice no the system should give the sold to party, payer and the ship to party and the complaint should be registered in the name of sold to party.

 ^Division

 Nature of complaint

 Customer Group.

The validity of the complaint should be confirmed in the SAP system by either after entering the coil number or the invoice number and either of these fields should be made mandatory. Once the coil number or invoice number is fed then the system should give the following details.

 Packet number / Coil no / invoice details (either of the one which has not been entered, coil weight for HR products.

 Truck no, price, delivery terms, transporter, Internal quality inspection report.

 Production date and date of despatch.

System should check the invoice / coil no/ packet number details with the customer code which given while creating the complaint document. If matching then only should proceed other wise should give error giving a message like “this coil no / invoice no is not pertaining to the said customer.

Customer Complaints shall be recorded in the system with the following reason codes:

QA – Quality Problem SD – Shortage in Delivery ED – Excess in Delivery DM – Damaged Material LO – Logistical Issues

For a Quality Problem, the customer shall raise a Quality Notification through Internet. If the customer does not have access, the Marketing Person shall create the Quality Notification with reference to a sales document and with details of the problem.

All other problems shall be sorted out though Debit Note / Credit Note

Using transaction code MB5B the delivery document no can be identified. From the invoice no the user can find the batch nos. and coil no along with the sold to party and other relevant details.

Once the complaint is settled then for

commercial settlement, a credit memo request may be created with reference to the original invoice. With reference to the credit memo request a credit memo shall be created.

To record the complaint and verify the same against actual requirement of the customer in case of various natures of complaints such as short supplies, deviation in chemistry, deviation in mechanical properties etc, a complaint settlement document shall be created wherein the user can enter the actual values of

parameters as reported by the customer against the values derived in the company. The system will verify the values reported by the customer

( A )

The fields available for recording the complaint may be based on the complaint.

Different types of complaints can be as under

 Quantity Complaint

 Quality Complaint

 Commercial Complaint

 Non-receipt of material.

 Others (Logistics)

Complaints types should be predefined in the system so that sorting is possible as per that. The required data entry fields should be given as per the type of complaint. For DRI and Pig iron products following are some of the complaint types.

Low Fe Metallization

Powder

Weight Shortage

For the above the system should ask for the complaint quantity.

One coil / invoice may have more than one nature of complaints.

The KAM & Customer services person responsible for resolving the complaint should be defined in SAP at the customer master level. One person may also be nominated from the Quality Assurance department by Quality Assurance for resolving the complaint and the complaint attending persons should be selected by QC chief and recorded in the complaint document.

After entering the complaint every complaint should have a distinct identification number and sorting should be possible based on any of the above mentioned fields or a combination of any of the above.

It may be decided by the individual key account managers if a visit is required and there should be a flag for indicating the same.

Multiple visits and multiple minutes of meeting

against the actual values and give the discrepancies.

should be captured. The MOM should be scanned.

File note, credit note and debit note to be generated in the system.

6.1.12.2 Quality Notification

All quality complaints to be recorded and notified to the Quality Department immediately

Immediately after saving the complaint document in the SAP, the same should go to the Customer services dept ID and to QA user id either by SAP mail or to their lotus note id.

Nodal agency for registering and monitoring the complaints shall be with Marketing – CMO.

1. By web-enabling the SAP R/3 system, the customers shall login using Internet

Transaction Server / Web Application Server and create Quality Notification with reference to the Sales Document. Or KAM should create quality notification with reference to sales order.

2. All details of the Problems in Quality shall be entered here. Any other details of the complaints shall be maintained in the description text of subject view of notification.

(A)

6.1.12.3 Complaint Settlements

Provisions for settling the Complaints in the following ways on the SAP R/3 system should be provided;

1. Free Deliveries 2. Credit Note 3. Debit Note

In SAP region wise following complaint settlement time should be defined.

 From complaint registration to visit

 Visit to entering the settlement value and quantity in the complaint document

 Settlement entry to creating a file note Region wise table of time to be specified

If the next process is not happening then a reminder messages (how many, and is it every day / weekly) should be sent to the Customer services & QS dept.

If no process is taken place after the last reminder, then a message should be forwarded saying that a complaint is pending for settlement of that customer for so many days (system should calculate the days from which is pending) with the latest status. If visited a visit report should be created by referencing

Customer Complaints shall be resolved on the SAP R/3 system depending upon the situation in the following ways:

The sales document in question shall be blocked first. After Complaint Analysis, one of the following shall be done:

 Returns

 Free Delivery

 Subsequent Free Delivery

If the material cannot be returned then commercial settlement shall be made.

1. A workflow is required to fully implement the customer complaint handling/settlement cycle.

2. Visit reports shall be maintained in SAP for customer complaints using the sales activity type ‘sales call’ mentioning complaint settlement as the reason. MOM and other necessary details of the visit shall be

maintained in text fields in the sales activity.

(A)

1 – (H)

the complaint document.

In the complaint document provision should be made to enter the compensation in terms of value and quantity against which the complaint has been accepted. Here provision should be done for recording the comments of dept heads.

System should have the following status flags, which are to be manually selected.

 Visit required

 Complaint is rejected

 Customer has withdrawn the complaint

 Material was not available for inspection In the complaint document system should show the following status of that complaint.

 Visit is not done – if visit required flag is selected and visit report is not referenced.

 Visit done and commercial settlement is to be done– if visit report is referenced to the complaint document

 Commercial settlement has been done – if the settlement value / quantity are entered

 File note is created – if a file note is referenced by the complaint

 Credit note issued – if a credit note is issued against a file note which is referenced by a complaint.

After this referencing the complaint or a number of complaints can make the debit note. There should an option of copying the coil wise details with the complaint into the debit note with the claim for every coil or there should be a consolidated figure stating the amount of claim made against a number of complaints.

The file note may then be made by referencing the debit note The system should compare the quantity settled with the quantity of the file note. If it is more then the same should not be accepted.

Then a credit note should be issued based on the file

note made after approval from DIC else if the same is not acceptable then a valid reason may be given for the same for not accepting the file note. Also the complaint status should be settled.

The complaint status may be available for various stages like if it is at visit stage, debit note stage, at file note stage, at credit note stage. Also a Segment wise / customer wise / complaint wise status of complaints settled and that pending for settlement should be available. Segment wise Overall status of complaints settled and that pending for settlement.

Once a complaint has been settled then the same should be communicated to heads of caster/ mill operations/steel melting shop/quality & logistics if required. Corrective & preventive action taken to see that the complaint is not repeated in future should be given by QA in system and a feedback on the same should be given to the customer. The value wise report to be generated to this extent.

Customer complaint handling/settlement cycle to be fully implemented.

6.1.12.4 Customer Returns (Sales Return)

Provision for return of material from customers and subsequent settlement should be available on the system.

In case sales return material the following procedure to be followed for plant:

i. The material to be received at gate with a letter from the party and duty paying documents

ii. Without the above the goods should not be allowed to enter the factory premises.

iii. The goods then goes to the logistics for reversing the entries.

iv. The excise department then takes the cenvat credit in cenvate register and transfers it to RG1.

1. Returns shall be handled on the SAP system in the following way:

2. A return order is created with / without reference to the Sales Order or Invoice on which material is send to customer.

3. A Billing block shall be maintained in the Returns Order.

4. On receiving the returned material, a

‘returns delivery’ shall be created and ‘Post Goods Issue’ is performed which brings back the stock into any one of the following (ISPAT’s) stock.

 Block stock returns

 Unrestricted use stock

 Quality Inspection Stock

 Block Stock

(A)

In case sales return material the following procedure to be followed for Depot:

1. The material to be received

at godown with a letter from the party and/or duty paying documents/delivery challan.

2. Without the above the

goods should not be allowed.

3. This should modify the

stock of depot after the goods receipt.

5. If the complaint is proven genuine, to approve the complaint, the billing block shall be released else a rejection indicator shall be initiated.

6. If the customer returns only some of the material, a credit memo shall be created for even the full amount. Alternatively, a partial credit memo shall be created for certain items even if the customer returns the entire quantity, by reducing him quantity in the Return Order to the quantity to be credited.

7. The Customer shall be a supplied

replacement goods by entering a reason for rejection for the appropriate items in the return order. Then a free of charge subsequent delivery with reference to the return order shall be created to send the replacement goods to the customer.

6.1.12.5 Free of ChargeDelivery

Provision for sending material at no cost to the customer should be made with reference to the complaint raised by the customer.

1. A sales document with the order type ‘Free of charge deliveries’ shall be created and subsequently a delivery shall be made.

2. A billing document with only taxes and duties like excise shall be made and sent along with the material to the customer.

(A)

6.1.12.6

Free of Charge Subsequent Delivery

In cases of material shortage in the earlier delivery, if ISPAT decides to send additional material at no additional charges, such provision should be available.

1. A sales document with the order type ‘Free of charge subsequent deliveries’ shall be created with reference to an order and subsequently a delivery shall be made.

2. A billing document with only taxes and duties like excise shall be made and sent along with the material to the customer.

(A)

6.1.12.7 Debit Memo In cases of excess material despatch in the earlier delivery, if ISPAT decides to recover the differential value from the customer, then ISPAT should be able to raise a debit note.

In Cases where the prices were wrongly quoted less, a debit memo should be provided.

The debit note should be raised for :

1. A debit memo request shall be created whenever ISPAT intends to recover the material value from the customer.

2. The debit memo request would trigger a billing document in which the differential value is mentioned along with the taxes and duties.

1 , 2 ,4 & 5(A) 3 – (H)

 Rate variance

 Delay payment interest,

 Sales tax and/or Excise Duty (Less payment)

 Conversion charges

 Bank charges for out station cheques

 Interest

 Services conducted for the customers

 Letter of credit interest charges &

 Others.

1. Customer debit note creation

should be through SAP.

2. Factory, Branches, Depots

should be able to track the customer receivables other than sales invoice and raise the debit notes through SAP.

3. Pre-audit from auditors, which are, being done manually should be through SAP workflow.

4. Posting of the debit notes to customer and GL accounts after the approval from auditors should be automatic.

5. Debit note No.,s should be

separate for each division and branch office.

3. Automatic audit of debit notes through work flow is not possible as work flow is out of scope.

4. Automatic posting of debit notes shall be possible.

5. Separate Number ranges shall be maintained for branch wise credit notes.

6.1.12.8 Credit Memo 1. In cases of material shortage in the earlier delivery, if ISPAT decides to reimburse the differential value to the customer, then ISPAT should be able to raise a credit note.

2.

In cases where the excess prices are charged, freight paid by customer on the behalf of Ispat or partial delivery a credit memo should be

provided.

3. Provision should be to record the details of debit note on us. And the same should be linked to the file note.

File note to be issued for the settlement value of the complaint and based on that a credit note to be issued with higher authorisation profile.

For all above credit notes customer has to raised

1. A credit memo request shall be created whenever ISPAT intends to reimburse the value of material in shortage to the customer.

2. The credit memo request would trigger a billing document in which the differential value is mentioned along with the taxes and duties.

(A)

debit note on Ispat.

In document SAP SD Blue Print (Page 91-99)