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Third Party Repair

Third-Party Repair
Overview
With third-party repair, your company can provide repair services for your customer that are fulfilled by a third-party
supplier.
For example, your company may not have the capacity to carry out the repair services for the product you sold to your
customer. If so, you need a third-party supplier to help you repair the defective products at their side.

You receive a request to repair a defective product from a customer and create a service order. After the
customer confirms the service order data, the service center (the third-party supplier) is informed of the
execution of the repair service by receiving a purchase order from your company. Upon receipt of the defective
product that is sent directly from the customer, the service center performs the actual repair work. Once the
repair is completed, the service center sends the product back to the customer and reports the time and
materials needed for the repair to the customer service unit. The purchasing department enters this
information as a goods and services receipt and a supplier invoice respectively. Then you can invoice your
customer accordingly.

Prerequisites
Configuration Settings

Configuration settings are usually performed by an administrator. If you do not have the required authorization,
contact your administrator.
Purchase Requests and Non-Stock Material and Service Procurement are activated in your solution
configuration. To find this business option, go to the Business Configuration work center and choose the
Implementation Projects view. Select your implementation project and click Edit Project Scope . In the Scoping
step of the project, ensure that Purchase Request and Order Management is selected within Purchasing.
In the Questions step, expand the Purchasing scoping element and select Purchase Request and Order
Management. Select Purchase Requests and answer the questions related to the automatic creation of purchase
orders. Select Non-Stock Material and Service Procurement and answer the questions related to the service
agents.
Service and Repair including Service Confirmation is enabled in your solution configuration. To find this business
option, go to the Business Configuration work center and choose the Implementation Projects view. Select your
implementation project and click Edit Project Scope . In the Scoping step of the project, ensure that Service and
Repair is selected within Service.
In the Questions step, expand the Service scoping element and select Service and Repair. Select Location and
Provider of Service and answer the questions related to the location and provider of service. Select Spare Parts
Handling and answer the questions related to the service order processing with spare parts.
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Process Flow

Third-Party Repair

The following is an example of a typical process flow of third-party repair.

1. Creating a Service Order
a. The service agent at the customer service unit creates a new service order for a defective product reported
by a customer. In this business scenario, the repair is not executed by the customer service unit but by an
external supplier. Therefore, a supplier service center has to be selected as the provision location of this
third-party repair service.
For more information, see Create a Service Order in the Tasks section of the Quick Guide for Service
Order Processing.
b. The service agent clarifies the return instructions to the customer and releases the service order after
having completed the entry of all the necessary data.
2. Releasing Service Order to Execution
a. After the customer has confirmed the service data, the service agent sets the status of the service order to
Released to Execution.
b. The system automatically creates a purchase request in order to start the third-party procurement.
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3. Creating and Sending a Purchase Order

a. The system creates a purchase order for the repair service from the purchase request.

If the data of the purchase request is not complete, the system cannot create the purchase order
automatically. The operational buyer adds the missing information and creates it manually.
b. The system sends the purchase order for the repair service to the supplier.

The operational buyer can also execute this step manually.

c. The purchase order is received by the supplier as a repair order.

When the service order is created, a description of the customer issue is entered in the Incident
description field. This field is found as a read-only note in the purchase request and purchase order that
are subsequently created from the service order.

If the service agent and the customer agree on a cancellation or a change of the created service
order before a purchase order is created, the cancellation or the change of the service order leads
to a cancellation or a change of the purchase request.
If the service agent and the customer agree on a cancellation or a change of the created service
order after the purchase order is created, the operational buyer is notified and clarifies with the
supplier whether a cancellation or a change of the purchase order is possible.
For more information, see Purchase Order Processing.
4. Processing the Purchase Order Acknowledgement
a. The supplier receives the defective product directly from the customer and can confirm the purchase order
by providing more detailed information, such as, suggested services and materials after a repair diagnosis.
b. The operational buyer compares the data in the purchase order acknowledgement provided by the supplier
and updates the purchase order accordingly. The status of the purchase order is set to Acknowledged.
For more information, see Receiving and Processing PO Acknowledgements.

In case of deviations or additional information within the third party repair context, the operational
buyer can forward the deviation task to the service agent, who clarifies with the customer about
further processing.

If the product can no longer be repaired, the operational buyer receives this information in the
purchase order acknowledgement and finishes the purchase order manually. The system then
updates the purchase request. The service agent contacts the customer to clarify possible further
processing.
If the repair order cannot be fulfilled due to shortage in repair capacity, the operational buyer
receives this information in the purchase order acknowledgement, cancels the purchase order
manually, and reprocesses the purchase request to find another supplier.
5. Creating a Goods and Services Receipt
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a. Once the supplier has finished the repair, he or she informs the operational buyer about the time spent
and materials used for the repair in form of an E-mail, letter, fax, or B2B message.
b. The operational buyer creates and saves a new goods and services receipt for the corresponding purchase
order that contains the services and materials used for the repair. To facilitate this, the system proposes
the relevant data available in the purchase order.
For more information, see Goods and Services Receipt and Goods Return Processing.
6. Releasing Service Confirmation
a. The system creates a service confirmation based on the data from the approved and posted goods and
services receipt. Customer-related terms and conditions are derived from the master data. The system
saves the service confirmation with status Not Started.
b. The service agent checks, adjusts, and completes the service confirmation and releases it. The status of
the service confirmation is changed to Released.

If the goods and services receipt is canceled after the service confirmation was created, the service
confirmation is also canceled. Depending on the reason of the cancellation, the already existing invoice
documents might be canceled as well. For more information, see Cancel a Goods and Services Receipt
or Goods Return.
7. Creating a Supplier Invoice
a. The system sends the invoicing-relevant goods and services receipt data to supplier invoicing.
b. The accountant creates a supplier invoice with reference to the purchase order that contains the services
and materials used for the repair. To facilitate this, the system proposes the relevant data from the goods
and services receipt in the invoice.
For more information, see Create an Invoice or Credit Memo with Reference to Preceding Documents.
8. Creating a Customer Invoice
a. As soon as the repair at the third party supplier has been completed and the service confirmation has
been released, the system creates a customer invoice request.
b. The service agent creates a new customer invoice.
For more information, see Create a Customer Invoice in the Tasks section of the Quick Guide for Invoice
Requests.
c. The service agent sends the customer invoice to the customer.
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