Now, onto more of the nitty gritty, what do you need to find out about the actual processing of the service orders.  In this part of the SAP SM blueprinting series we cover what do you need to find out when it comes actually performing the repairs.  So let’s get into it.

How many service orders do you process in a day/week/month?

It’s old fashioned, and I think everyone knows this, but I’d hate to skip over the obvious.  This question helps you gauge how to structure your processes.  Just having an idea that the service department processes 1 order every 2 weeks, or they process 25 in a day.  You’ll need to start thinking about how the service group will see their open orders, how they will notify other groups when they start or complete the orders, etc.  Simply put, the answer to this question will set the stage of what you need to do for all realization about the actual repair process that occurs.

How many different service order types do you utilize, and what is the purpose of each?

You may need to phrase this question differently depending on your audience.  The gist of the question is determine how different “types” of orders you process.  A type of order is anything that it is either tracked separately for financial or processing issues.  For example, if the accounting department needs to separate the costs of an Field service type order from an in-house order.  Sometimes, it’s purely fro reporting to know which orders need to processed ahead of others (for example, an in-house repair would need to be processed before the exchange orders that will just go back into your “spares” inventory.  Keep in mind, the more order types you create, the more maintenance you will be responsible, so like everything, drive to the minimum number of order types you can.

Do you break a single repair up into multiple smaller pieces?

SAP uses sub-service orders to accomplish the breaking of main service order up in multiple pieces.  This is especially useful when you deal with equipment that is broken into multiple pieces for repair.  This often happens with larger pieces of equipment that get broken down into more management sub-assemblies, each that need their own repair.  Sub service orders in SAP work great for this, because you are not allowed to complete the “main” service order until it’s sub-service orders have been completed.  So you can build an entire structure of orders if your process is complex.  However, remember that using these orders now doubles or triples the amount of master data to maintain for each order.  So if your shop is small, be aware they will have to do a lot more system work.  Short story, only implement if needed, and make sure that the people that will be dealing with day to day

Do you perform subcontracting for any service repair (in-house or external)?

Another thing to determine is if you have to worry about any subcontract or 3rd party to do work on a part.  There are several different ways that you subcontracting impacts the service order.

• The first way is that you need a component that is purchased.  In SAP, if you don’t have the material in stock, it will generate a purchase requisition for the component.  It may also be for a part that is not maintained as a material master in your system  (this could be something like ordering hammers for the field service tool belts).
• The next way is that you may send the part being repaired (or a portion of it) to an outside vendor to perform a specialized service or process that you do not offer.  It could be special diagnostics or tooling on the part.  This again requires a purchase requisition.
  • do you need to see that the inventory has left your facility?  In SAP, you can implement the A&D solution to actually perform the material movements and SAP deliveries to show that the part has left/come back into the facility.  This is very nice functionality, but keep in mind that it has limitations, and it adds multiple additional steps to the process.  Find out how necessary the requirement is perform you promise it.  It requires certain enhancement packs to be installed and activated, so if you go down this path, you’ll need to work with the basis/development team to accomplish this.
• The next thing to consider is, do you use a 3rd party service center to do the entire repair.  In this event, please check out my post on Warranty Claims:  SAP Warranty Claims: A Guide for Beginners

How should the costs be broken up?

The cost breakdown is simply the broad categories that display on the service order as you do planning or actual hours & components.  Some of the common breakdowns include:

• Labor
• Travel Costs
• Components
• External Components
• etc…

Remember, these categories have no impact on anything financially.  It is simple “buckets” that the particular cost elements are grouped into to.

Do you perform repetitive service tasks for certain products?

This question is related more to master data than service processing, however it fits much better into this portion of the blueprint.  It’s important to find out if your client does repetitive steps for a particular repair.  This could by service material (service process) or by serviceable material (material that is being repaired).  If the same steps are performed every time, you need to set up General Task Lists, and teach the business how to use General Task Lists.  If you are not familiar with these tasks list, it’s simple a routing and component list that can be automatically copied into the service order upon creation.

How do you need to track your time entries to the service order?

This question helps you drive to the answer of if you need to pursue CATS (computer aided time sheets).  CATS is a useful tool if you use SAP to handle your payroll and your service orders.  Keep in mind that the standard time entry tools for service orders (IW41, IW42 for example) can handle entering in personnel numbers, multiple confirmations, etc.  CATS certainly provides better reporting, and looks more like a time sheet for your employees entering their time.  CATS will certainly require a lot more configuration, including setting up an organization structure (often a difficult and controversial topic for any organization).  As a general guideline, I will steer clients away from CATS unless they have solid reasons for using it (often if the client does Project Systems and Service, both will want to use CATS, then it makes sense to use CATS).

If you perform service at the customer’s location, who enters in the time and material for the job?

This question is typically more business process related, but it is certainly information you need to know.  The reason it’s important is because you need to know if field personnel will be entering in their own time and materials, or will they be emailing, faxing or mailing in their time sheets to someone in an office who will enter it for them.  If they intend to enter it in the field, you need to know if they have internet connection in the area.  In our day and age, most places have internet coverage, however there are still locations on our globe that do not have easy connectivity or have very weak or slow connections.  In that event, you need to be very sensitive to making someone log into SAP, if they are using just a 3g network.  You may need to look into a web interface that provides a small amount of bandwidth to get the confirmations entered.

If you perform service at the customer’s location, do you ever send components for a service job?

This is one of the famous loaded questions you ask.  It’s pretty rare to do service and never send components.  The reason for this is to determine HOW you need to handle the components.  There are several common ways to handle this.

• The service technician is located at the office or a plant with parts and takes parts with them to the customer.  In this event, the technician simply issues the parts to the order and removes them from stock.  Packs them up, and takes them to the client.  If there are extra parts, they are returned to the warehouse after the completion of the job.
• The service technician maintains “trunk” stock.  This simply means they have a list of stocked components with them at all times.  These “trunk” locations are typically a storage location in SAP.  Then the stock is issued from their SLOC to the order.
• The parts are shipped ahead of the tech by way of a sales order/delivery process.  They are shipped directly to the customer, perhaps as a no charge order, but this again needs to be determined by the business.

If you perform service at the customer’s location, do you perform scheduling of your technicians?

Now this question will often get a quick “Yes” from the customer.  However, you need to dig into the how.  Many clients simply track their techs on MS Outlook, Excel, or the big calender hung in the boss’ office.  Now some clients have a far more sophisticated method to track their people, and when they are available, but you need to know what level of complexity you need to implement.  In addition, you need to find out if they track the travel time, how are the tech’s schedule maintained?  Is there an automated connection to the call center?  Do they schedule “real-time” with the customer? Who has access to view this?  Do they track skills of each tech to determine who can do what?  Keep in mind, to implement this in SAP is usually a very custom solution requiring quite a bit of development.  SAP does offer a solution, but it is an add-on, and last I looked into it, it is only for CRM.

Do you perform any service parts planning?

Service parts planning can often mean a lot of different things depending on the client.  Some of the things you need to determine are:

• Are the parts being planned independent of the production demands?
• If it is a shared stock, who wins?  By that it’s important to understand in the event of limited stock, does a sales order get the stock, does service get the stock or does production get the stock?
• How do you forecast service demands?  How much history is currently used to determine the service forecasting?

Alright, here’s the stuff I can think of related to service processing.  As always, I welcome your comments on anything I missed, or even anything else you would like me to cover…  Next time we’ll talk about a few of the remaining “oddball” items, such as forms, technical stuff, and financial stuff.

Thanks for reading,

Mike

This next installment of SAP SM Blueprinting is a short and sweet one, but be sure not to over look these details.  If you perform in-house repairs or returns, you need to understand what processes need to be accounted for.  Here’s a good starting point.

Do you currently have any special processes or requirements after receiving the material into stock?

Often when you receive materials into your plant, there are special requirements, special areas, or people to notify.  Be sure to check if any of the following might apply:

• Does the inspection or service department need to be notified?
• Does the customer receive any notification when their part has been received?
• Does Customer service need to be notified upon receipt?  This could be to issue a credit, or an email to the customer.
• Do any movements need to occur from the dock to the service department?

Where do the returns get received?

While this is a simple question, it can have a lot of configuration implications.

• Do you need a specific storage location for all repairs and/or returns?
• Will the repairs be processed in an inventory managed or warehouse managed storage location?
• Is a unique shipping point needed for repairs?  This is often very helpful in the storage location determination.
  

The ever present of question of serialization

It seems question never goes away.  Shipping and receiving is often the forgotten when dealing with returns and repairs.  If your shipping and receiving areas are familiar with serial numbers, this should go pretty quickly.  However, if serialization is new to the group, be sure they are prepared for the following

• Repairs may require a serial number, what if the serial number isn’t readily available or visible?
• What if the serial number returned doesn’t match what is expected?
• Will shipping ever be required to create a serial number for a repair?  If so, is the labeling hardware available in an accessible location?

Shipping the Product back to the customer

• Do you need to be concerned with returnable packaging?
• What paperwork needs to be provided to the customer upon return of the product?
• How are special shipping instructions provided to the shipping department?

Hope you found this helpful, and as always, please post anything else I may have missed or if you have any questions.

Thanks,

Mike

Well, I’m back again to continue my blog on blueprinting for SAP Service Management / Customer Service.  This next portion tends to be one of the biggest areas for me in dealing with SAP SM blueprinting.  I’ll do my best to keep it straight forward to give you the best details I can on SAP SM Blueprinting.  Please also refer to my other posts about Master Data and the Call Center blueprinting.

What processes does your business currently utilize?

This one simple question usually has the most impact on the service blueprint, at least in my experience.  You need to understand what processes your customer currently uses.  Once you understand what those processes are, you should be able to map them to SAP relatively easily.  Inevitably, some of the processes won’t be mentioned, so do your best to ask about each of these in detail.

• Repair and Return Processing (in-house)
  • This is the standard SAP repair processing.  This will involve sales orders, deliveries, service orders and often notifications.  There are a lot of variations that can be built into this standard process, and you’ll want to understand if any of them apply.  Some of the variants include:
    • Are Loaned Items offered to customers?  are they offered to all customers or only customers who have purchased a “premium” service of some time.
    • How does scrapping need to handled for customer own equipment?
    • Is it fixed price billing?  or Time and Material billing?
  • How many in a day/week/month?
• Advanced Exchange Processing
  • This process is a variation of the standard repair process.  The exchange is simply sending a new unit to the customer before receiving the customer’s unit.  This is often offered as a premium service to customers.  Some questions that need to be addressed for this process include:
    • How does billing occur?  is the customer billed as soon as the exchange is sent, and credited upon receipt of the customer’s equipment? Or is the customer billed after the unit is received and repaired?
    • Are brand new units sent as an exchange?  or are refurbished units sent as as exchange?
    • What happens to the repaired inventory?  Is it stocked as a new number or different valuation type? is it put back into stock as new?  Does it need to go to a special inventory location?
    • Does the repair of exchange need to be tracked separately?  does it require it’s own service order type? does it need special scheduling, for example all standard repairs must be done first before working on any exchange units?  It is first come, first serviced?
    • Is it fixed price billing or Time and Material billing?
  • How many in a day/week/month?
• On-site/Field Service Processing
  • On-site or Field Service is usually the easier process.  Typically this consists of a service order that gets charged time and expenses.  However, like everything else, there are a lot of processes that can be combined with on-site service.
    • How do you deal with components needed for the On-Site work?  Are the parts sent to customer directly?  do you use “trunk” stock where your technicians carry their own stock?  Do you charge the customers for the shipping of parts?  Do you ever use customer’s parts in the order and if so, do you need to account for those in any of the processes?
    • Do you use sub-contractors or 3rd parties to perform any on-site work?  Do you need to track items like per-deim? hotel? airfare?
    • Do you track or charge for travel time?
    • Do you schedule your technicians?  need a calender of events to know who is where?
    • How are costs currently tracked/entered?  do the technicians enter the information?  is the information sent to someone on-site?
  • How many in a day/week/month?
• Returns for Credit
  • The easiest of the service processes, the simple return for credit.  No repairs, no replacements, just a credit.  Some additional pieces to consider include:
    • How does the stock need to handled when it is returned?  does it need to be sent to quality, repairs or production before issuing the credit?
    • How is the process handled if the material is damaged upon return?  is credit still issued?  is it partially credited?  Is it repaired, and if so, where does the cost go?
    • When is it returned to stock?  can it go back to unrestricted inventory as is, or does it need to be a different valuation type or a different material?
  • How many in a day/week/month?
• Returns for replacement
  • This is a gray area as far as I’m concerned in the service world.  This could actually fall under the repair process and be executed like a service exchange, or it could just be a return order, with another sales order (free or paid) order to follow up.
  • The biggest think that drives this one way or the other is finance.  If it should count for or against your service revenue, this by all means, add it to the service process.  However, if it’s just a cost of sales, you’ll want to be careful trying to make it fit into service.  Someone’s budget might take a hit that they weren’t expecting.  In general, try to steer this away from repair orders.
  • How many in a day/week/month?

Do you perform quoting of repairs? 

Such a simple question… right?  nothing ever is in SAP.  When you talk about quoting in the service order, there are always little considerations you have to take into account.  So make sure you know what you need in advance.

• Do you quote in house repairs?  if so, do you quote them before or after the product arrives in-house?
  • If you quote them after, please check out my blog post: SAP SM: Quoting In-House Repairs.  It will explain how to quote using the repair sales order you received the repair on.
• Do you quote time and materials?  or do you quote as a fixed price?
• Do you need to begin processing before the quote is approved?  for example, do you need to make or buy materials that have a long lead time?
• How do you track your quote approval/rejections?

How do you price/bill your repairs?

The pricing and billing of the repair order is actually a much easier question (at least initially).

• Do you offer fixed price repairs?
• Do you offer time and material billing?  If so, what do you bill for?
  • Labor?
    • do you break it out by straight time, over-time, travel time?  If so, do you have pricing and costing rates for each of them?
  • Materials
    • do you break it out by material types?  Finished goods? raw materials? etc?
    • Do you display each material used?  or just lump them all together into a single total?
  • Subcontract
    • do you need to break this into labor and materials as well?
  • On-Site expenses?  do you incur these?  If so, how do these need to be broken down to the customer?

Do you deal with warranty of products?

Warranty tends to be one of the most challenging pieces to deal with when it comes to the repair process.  There are a lot of variables, and it seems that everyone handles it differently.  So make sure you collect a lot of information.  I’ll do my best to arm with as many questions as I can think of.

• How do you Track warranty?  is it through serialization? equipment records? time of shipment?
• When does the warranty start?  shipment? registration? receipt? time of creation?
  • if it’s registration, how do you track that?  is there an interface?
• How your warranty measured?  straight time? operating hours? mileage? or a combination of multiple things?
  • If it isn’t straight time, how do you track the other metrics?  is there any automation to capture the numbers or is it a manual process?
• What is covered by the warranty?  Time? Materials? customer service? on-site service? everything?
• When do you know that something is warranty?  do you know at the time of the customer contact?  or not until you actually evaluate the material and see if it falls under warranty (this is a big one in determining how to handle warranty).
• Do you accrue for warranty costs?  if so, how?  is money taking out of each sale of particular parts to go into an accrued warranty account?  is there no accrual?  What accounts should be credited/debited when doing a warranty service of any time?
• Are there special considerations for profitability or COPA?  (I’m no expert here, so if you’re like me, make sure you have your FICO person available to translate. ha ha)
• what happens if someone doesn’t state it’s warranty?  what is the process going to be? (this one is always more for me, because without fail, setting something as warranty is often forgotten and need to be corrected after the fact.  Have a plan for this)
• Do you perform your own service work for the warranty, or do you allow 3rd parties to repair the product and then bill you? (if so, see my post SAP Warranty Claims: A Guide for Beginners).

Do you use service contracts/extended warranty/etc?

Since we’re talking about warranty, the conversation wouldn’t be complete without talking about contracts.  Unless you offer a lifetime warranty, often you will give your customers an option to purchase an extended warranty or perhaps some sort of maintenance plan.  Like warranty, contracts require a lot of information to set the process up correctly.

• What do you sell under a service contract?  is a yearly maintenance visit? X hours of support?  full repair/replacement?  Exchange processing for quick turn around?  extended warranty, for some or all facets of your product?
• Do you use deferred revenue for the contract?
• Do you use a billing plan?  or do you bill everything up front?
• What accounts need to be credit/debit for the contract revenue?
• How is service recognized? what accounts needs to be credited/debited when something is under contract?
• Will you track specific serial numbers under the contract?  or any products the customer owns? (serial number tracking is encouraged)
• DO you have a cancellation policy?  do you have a method for extending the contract?
• Do you track the costs vs. revenue associated with the contract?

This was a big topic, so inevitably, I missed something.  Please add things I have overlooked to help all of us get better at blueprinting,

Thanks,

Mike