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Introduction to ARM in SAP S/4HANA

Advanced Return Management (ARM) in SAP S/4HANA

For some time now, the SAP ERP system has provided tools for handling or processing returns. However, these tools are no longer sufficient to meet the increasingly complex requirements of returns processing. As a result, SAP recognized the need to take action and has now delivered SAP ARM – a solution that builds on existing functions within the SD and MM modules. Moreover, SAP ARM provides tools that integrate the entire process into one end-to-end process (i.e. from order creation through to inspection management and credit memo creation).

What Is SAP ARM?

ARM stands for "Advanced Returns Management". Here, the word "Advanced" stands for the creation of a returns order or purchase order whereby the follow-on functions can be combined, bundled and triggered on a cross-module basis. This, in turn, enables the entire returns process to be managed in a more efficient and transparent manner.
ARM can be used to process both customer and supplier returns. Full functionality is therefore achieved, which allows all scenarios to be implemented.

What Features Does SAP ARM Offer?

SAP ARM has a wide range of features that are delivered with the following additional functions in ARM:

1) Material Inspection
Here, warehouse or sales employees can enter inspection results directly in the returns order or, in the case of supplier returns, the results can be entered in the transaction "Material inspection" in the warehouse.

2) Logistical Follow-Up Action
Here, you can specify the final place of destination for a returned material (for example, "Transfer to Free Available Stock" or "Transfer to Scrap").

3) Automatic Creation of Follow-Up Documents
Once the follow-up action has been triggered, the system automatically creates the corresponding follow-up documents in the background.

4) Returns Refund Determination
The returns order specifies whether a customer will receive a refund and, if so, the type of refund. The refund amount can also be specified here.

5) Overview
To facilitate tracking of all steps within the returns process, the transaction "Returns overview" enables you to view all follow-up documents and information concerning the status of the return.

Process Flow
SAP ARM covers all necessary process steps and, by doing so, provides consistent and transparent support for complex returns scenarios. The end-to-end process comprises the following steps:

  • Returns document: Creation of a returns document that refers to a purchase order or sales order
  • Returns order
  • Returns purchase order
  • Transport and goods movements: After a returns document has been created, the goods are transported or moved to the defined place of destination.
  • Inspection and follow-up action: Here, the goods are inspected for completeness and damage.
  • The inspection results can then be entered either directly in the returns document or in a separate step. Subsequently, a refund can be processed (optional).

The following options are available:

  • Refund for customer returns and credit memo request
  • Credit memo/cash refund
  • Refund for internal returns
  • Credit memo

Benefits at a Glance

Advanced returns processing is an all-in-one tool that makes any type of return simple and transparent. SAP Advanced Returns Management is therefore suitable for anyone looking for an intelligent and powerful solution to handle complex returns processes.

The key benefits are:

  • Time savings
  • Fewer sources of error
  • Greater transparency
  • Standardized process
  • Included in the standard SAP system (no additional license costs)
  • Automation
  • Numerous logistical follow-up actions available
  • Manageable costs for Customizing settings

XEPTUM supports you in the development, implementation and execution of end-to-end returns processes in SAP ERP and SAP S/4HANA.

Would you like to learn more about the different processes within SAP ARM? Contact one of our XEPTUM experts about the possibility of integrating Advanced Returns Management into your SAP system to sustainably reduce your rate of returns.