Return an intercompany sales order
Scenario
DEMF, the buying company, returns items to USMF, the sales company's warehouse. At the USMF warehouse, the warehouse worker who's managing returns makes the decision for extra processing of the returned items. The reason might be that the returned items are scrapped, repaired, replaced, stored in the warehouse, or perhaps returned to the production company that's an external vendor for USMF.
To perform an intercompany return, in the selling company USMF, the sales clerk opens Sales and marketing > Sales returns > All return orders and creates a return order based on the original intercompany order. Then, the system automatically creates a purchase order of the type Returned order in DEMF.
When handling a return order, you can specify a return reason code to identify why the product is being returned. You must also specify a disposition code and a disposition action to determine what should be done with the returned product.
You can apply a disposition code when you create the return order, register item arrival or packing-slip update an item arrival, and end a quarantine order.
You can define any disposition codes that you need to support the business processes.
Direct delivery return orders
When an external customer returns items directly to the production plant instead of sending the items to the sales company, it's called a direct return order.
Supply Chain Management completes the syncing and updating processes between orders in the intercompany chain, and you can control these processes from a single location. For example, if you update the packing slip of the intercompany sales order, the system automatically performs all other packing slip updates in the intercompany chain.
When you create return order lines, use the Find sales order function to refund the customer the exact amount that they paid for the items. You can also use the correct return cost price. If you enter the line manually instead of using the Find sales order function, you risk that prices and discounts might differ from what the customer was originally charged.
Disposition codes
To support intercompany returns, you can use Supply Chain Management to map disposition codes to the corresponding internal disposition codes. When you set up an intercompany chain, the disposition codes in the two companies that are mapped to one another must refer to the same disposition action. If they differ, the synchronization process is unsuccessful.
Direct delivery and disposition codes
The following general rules apply to original return orders in scenarios that involve intercompany direct deliveries:
If the underlying disposition action on the original sales order line is Credit and Scrap, Credit, or Return to customer, the system applies the Credit disposition action. However, the Return to Customer action code sets the net amount to 0 (zero) on the existing line and on the newly synced line from the intercompany sales order. In addition, the system never syncs scrap lines. When you add a line to an intercompany sales order, the system never syncs it for a sales order that has a positive quantity and a disposition action of scrap (for example, Credit and scrap or Replace and scrap).
A scrap line is a temporary, hidden return order line that the system creates in response to a return order line that receives a disposition action implying scrap. The system creates a scrap line with the same quantity as the return order line, but with a positive sign. The system reserves the two lines against one another, which prevents people from reserving and other orders from consuming the returned items. The system removes the scrap line again when it completely processes (invoices) the return order.
An underlying disposition action of Credit and replace or Scrap and replace isn't overruled. It's treated as a disposition action of Credit and replace or Scrap and replace. This rule applies even if you don't create a scrap line in the selling company and you don't create a replacement order in the production company (the company that receives the returned item). The system creates a replacement order in the selling company only when you complete a packing slip update.
Sync disposition codes
In a return order-initiated direct delivery chain, the intercompany return order line supports all disposition actions. However, if your company returns a product to the customer, you should confirm that the delivery address on the return order matches the customer delivery address that's on the original order.
When you assign a disposition code to the intercompany return order line during item arrival or inspection, the system syncs the disposition code from the intercompany sales order line to the original return order line.
Disposition codes don't exist for purchase orders. Therefore, you must complete the synchronization of disposition codes from the intercompany sales order to the original return order from sales order to sales order.
Replace returned items
If you're replacing a returned item, and you've already created a replacement order, then you can't select a disposition code and the system doesn't create another replacement order in the selling company.
You can select if the system should sync RMA numbers automatically between the intercompany sales orders and intercompany purchase orders.