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Describing Loans

Objectives

After completing this lesson, you will be able to:

Explain the concept of loans
Explain the differences between loans and returns

Loans

In this lesson, you will learn about:

Documenting temporary transfer of material between units by using a Loan.

Scenario

Your unit manages inventory of materials, but requires additional material temporarily due to an upcoming exercise. You agree with your sibling unit on a temporary loan of their material to you for the duration of the exercise.

Loans

The image explains the concept of loan, which is a temporary transfer of equipment or material between units. It can be done with or without a transfer of ownership. For the duration of the loan, the equipment can be used like any other asset of the unit. The image also mentions that for the loan transaction, the authorized/actual comparison in the AAC report must return the same result as before the loan. The image includes a screenshot of a purchase requisition form, which appears to be related to the loan process.

Normally, loans will be created between stock elements. One can also loan equipment from a logistics authority, but a typical scenario is to loan property from another tactical-level unit.

The image illustrates the process of loan planning, loan execution, use of loaned equipment, return planning, and return execution in a logistics system. It shows the key steps involved, such as creating a loan purchase requisition, converting it to a loan stock transfer order, issuing goods to the loan, maintaining and using the loaned equipment, transforming the loan return preq into a loan stock transfer order, and issuing the goods back from the loan. The image also highlights that the system automatically creates a return preq in the background when a purchase requisition is defined as a loan.

When a loan requisition is converted to an order, a return delivery requisition is created automatically. The return delivery requisition (RD Loan) generates an expected receipt for the issuing force element and an expected issue for the receiving force element.

A loan request from another unit is a type of request that triggers a future return:

Characteristics of the loan process:
- The requester asks another unit for a material and provides the date when the material will be returned.
- At the time, a loan request is converted into a stock transfer order, a return request is also created automatically. In essence, a stock transfer request is created switching requester and supplier from the original request including the return date.
- For the loan transaction, the authorized / actual comparison must return the same result in the loan period as before the loan.
- The loan has no impact on AAC when the request is turned into a stock transfer order because a return request is created.
- Different Document Types used for Loan Purchase Requisition, Loan Purchase Order and Return Delivery Purchase Requisition (Loan) than those used for respective documents during standard process for Material Request / Return Delivery process.
Fulfillment of the loan request and the return is the same as for any other request for NCGs.

Usually, a loan request is raised against a stock element, not a provisions element (=> a unit lends its own equipment).

Generally, a loan does not transfer maintenance responsibility to the receiving unit.

The Loan Process does not influence Authorized / Actual Comparison: i. Loan Purchase Requisition not taken into account as "Planned" quantity. ii. Loan Purchase Order taken into account as "Converted" quantity, but balanced by Return Delivery Purchase Requisition (Loan), created automatically in the same process step ("Planned" quantity).

The image shows two screenshots of a SAP system interface. The top screenshot displays the Execute All Material Plans section, where the Direct PO generation option is selected. The bottom screenshot shows the Manage Purchase Orders interface, with details of stock requirements and delivery dates for a specific material.

A loan request will typically be converted into an order by the contributing unit (the unit that usually owns the goods to be moved).

The image shows two parts of a SAP system interface. The left side displays a Create Purchase Orders button, while the right side shows details of a purchase requisition, including the material number, purchasing organization, and delivery date. The bottom part of the right side displays a table with stock/requirements details, including delivery dates and quantities for a specific material.

After Conversion, the original request line is now marked as LN SL instead of LN REQ. A return request ("RD Loan") is created with delivery date adopted from the "return date" of the original loan request.

Differences Between Loans and Returns

Similar but very different: (automated) return versus loan process

Return versus Loan

Return Process	Loan Process
Intact material is required as a substitute for defective material.	Material is only temporarily requested.
Defective material has to be sent back in exchange for the intact material.	A loan request can be determined by loan identifier and return date assigned to purchase requisition.
Determined by return code (material master).	Return delivery purchase requisition created when original purchase requisition is converted to a purchase order.
Return purchase requisition created at goods issue time at the supplier. Return date equals the goods issue date.	Return date already specified in original purchase requisition.

While in both processes, a return request is created automatically, Returns and Loans represent different activities. The typical usage of the former is between a requesting unit and logistic authority, while the latter is typically performed between a requesting unit and another tactical level unit.

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