Understanding RMA

An RMA is an approval from the supplier for the customer to return inventory for credit, replacement, or repair. The system creates an authorization number for the supplier to track the return of the inventory. This is also known as Returned Goods Authorization (RGA).

When you create an RMA, you can create a purchase order to receive the old product and a sales order to ship a replacement. Or instead of shipping a replacement product, you can create a credit order. You can indicate how the system creates purchase orders and sales orders by setting up processing options for versions of the Sales Order Entry program (P4210) and the Purchase Order program (P4310) and specifying those versions in the Return Material Authorization Defaults program (P40052).

The system uses next numbers to generate the RMA number. The RMA number associates the purchase order with the sales order.

You can create a purchase order to receive a returned item, which enables you to take advantage of system processes such as receipt routings, warehouse puts, and quality inspections. You can also create a sales order to ship a replacement inventory item to a customer or create a credit order to issue a credit for the return.

With the RMA module, the system can perform these functions:

• Trigger invoicing for parts or machines not returned.

• Deduct inventory and forecast the reorder level based on usage.

• Substitute parts wherever parts numbers are involved (reservation, shipping, receiving, balancing, backorder fulfillment, and so on).