Selling Equipment Covered by Warranty

This document explains the process of selling equipment that is covered by warranty. The process includes:

In the warranty management process, the equipment is the same as a serialized item. The serialized item is defined as a model in 'Model/Site. Open' (MOS400). Warranty management can only be done for serialized items.

Outcome

The following takes place when equipment is sold with a warranty:

You can monitor and follow up all warranty events and transactions in the M3 Equipment Profitability application.

The following tables are updated:

Before you start

Follow These Steps

Outline
  1. Sell Equipment and Enter a Customer Sales Order

    When you sell the equipment, start by entering a customer order in 'Customer Order. Open' (OIS100). You enter the order line for the equipment (a serialized item) in 'Customer Order. Open Line' (OIS101).

    A serialized item creates a unique record that can be referenced for history purposes.

  2. Check Automatically for Predefined Warranty Conditions

    A check is made automatically to verify whether the equipment is covered by warranty according to the settings in 'Equipment. Connect Warranties' (MOS700). If you defined specific warranty conditions, the check can be made on the equipment level as well as for installed components. Note that fund creation is only done on the equipment level (see Add Internal Fund Creation Charge Automatically).

    If the equipment is granted for warranty, then the warranty type is saved on the customer order line and displayed on the detail panel (OIS101/G).

    If no predefined warranty conditions exist, then the warranty type field is left blank on the customer order line.

  3. Decide Manually to Overrule the Automatic Check for Warranty Generation

    The warranty type can be manually changed, added or removed. But you must make your changes before the equipment is dispatched from the warehouse, since this is the point in the process when warranty records are generated.

    For example, you can:

    • Change to another warranty type to enable more customized warranty conditions.
    • Manually generate a warranty for equipment that is normally not granted for warranty by entering a warranty type on the detail panel (OIS101/G).
    • Remove a warranty type from the customer order line in order to prevent automatic warranty generation.
  4. Add Internal Fund Creation Charge Automatically

    When you already have a warranty type saved on the order line, then the fund creation charge is automatically added to the customer order line when entering equipment with a warranty. The fund creation charge is retrieved from the warranty type settings in 'Warranty Type. Open' (MOS710).

    The fund amount is an estimated internal cost for future warranty situations where warranty claims on the suppliers are not supposed to be fully approved. In the settings for the fund creation charge, it is defined how much of the sales price you set aside for the warranty fund. Note that you can only set aside a fund for the equipment that is entered on the order line. No fund is created for installed components that may be granted for warranty.

    If you remove the fund creation charge from the customer order line, you prevent creation of the warranty fund.

    You can use different calculation methods to calculate the fund amount, for example:

    • Fixed amount per order quantity
    • Percentage of the gross or net sales price.

    You can use object control fields to set different percentages or amounts for different attributes, such as product groups.

  5. Sell Extended Warranty

    An extended warranty is sold by entering an order line for the extended warranty type "Item." The item is a non-material item (item category 13) with the non-material type "Extended warranty." The item number is the same as the extended warranty type ID.

    When you want to define the equipment for which the extended warranty is sold, you connect the extended warranty customer order line to a specific equipment customer order line on the same customer order. You connect the two customer order lines through a dialog box that is displayed when you enter the extended warranty customer order line.

    You can also sell an extended warranty to already sold and delivered equipment. In this scenario you must enter the equipment using a pop-up window that is displayed during entry of the extended warranty customer order line.

  6. Deliver Equipment

    Deliver the ordered equipment to customer. The customer order is delivery reported in 'Picking List. Report' (MWS420).

  7. Create Warranty Records Automatically

    A standard warranty record, an extended warranty record, or both are generated in 'Equipment. Connect Warranty' (MOS390). The warranty details are generated in 'Equipment. Open Warranty Details' (MOS393).

    The generated standard warranty conditions can be changed if any specific conditions should change or new conditions are added for the equipment. You make the changes in 'Equipment. Connect Warranty' (MOS390).

  8. Invoice

    The warranty information is printed on the invoice and also on the quotation and the order confirmation. The warranty information includes the warranty type ID and description.

    The customer order is invoiced in 'CO Invoice. Print' (OIS180).

  9. Create Warranty Fund Automatically

    A standard warranty fund, an extended warranty fund, or both are created automatically. You can follow up the fund for equipment (serialized items defined as models in 'Model/Site. Open' (MOS400)) in the M3 Equipment Profitability application.

  10. Create Sales Statistics Automatically

    Sales statistics are created automatically.

    The standard warranty type is updated in the statistics and can also be used as a key object. The key object allows you to obtain statistics for each standard warranty type.

    The extended warranty is the same as an item number or extended warranty type ID (see Sell Extended Warranty). You use the ID for the extended warranty type to obtain statistics for each extended warranty type.

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