Introduction
The managing returnable packaging materials process consists of controlling and supervising the lifecycle of packaging materials that are intended for reuse. This includes tasks such the following:
- Master Data Management
- Inventory Management
- Tracking
- Rental Fees Calculation and Invoicing
- Planning and Replenishment
- Coordination with Suppliers and Customers
The goal of this process is to optimize the utilization, availability, and efficiency of returnable packaging materials throughout the supply chain, while minimizing waste, costs, and environmental impact.
A closed-loop system is the predominant approach for managing returnable packaging materials, enabling the efficient circulation and reuse of these materials within a specific supply chain network. In this system, the packaging materials are continuously returned and exchanged between the production plant, designated as the exchange location, and the customer or supplier, designated as the exchange partner.
The management of returnable packaging materials in a closed-loop system with the customer typically involves the following activities:
- Ship packaged products to the customer.
- Receive empty packaging materials from customer.
- Verify that the customer's stock has been accurately updated.
- Check that the inventory of packaging material is updated at both the customer's location and supplier's plant.
However, stocks of returnable packaging must be managed as follows:
- Separately from the rest of the inventory to know exactly what is stored at customer locations.
- Separately for each customer.
Deliver Packaged Products to Customer
Process Step Execution
When goods are sold to a customer, the goods may be shipped in returnable packaging. During order or delivery processing, the system automatically determines the appropriate returnable packaging if packing instructions have been maintained for the material. However, you can also specify returnable packaging manually during the packing process.
Hint
- For shipping returnable packaging to the customer, no separate order type is required. The transaction is a normal business transaction and you can use a standard sales order (OR).
- Returnable packaging shipment is not relevant for billing purposes because the returnable packaging stock with the customer remains the property of your company.
Result
The material document generated through the goods issue posting will reduce the stock of packaging material in the plant, while simultaneously increasing the account balance in the customer’s account.
Receiving Empty Packaging Materials from Customer
The customer returns the returnable packaging to the production plant. The transaction will be recorded in the system, for example, by creating a purchase order or simply posting the goods receipt directly in the system. The same can be achieved using a returnable packaging pick-up order (order type RE).
Process Step Execution
- Create a sales order using order type RE.
- Enter the required data on the customer, the returnable packaging, and the plant to which the materials are to be returned.
- Enter all other relevant data and save the order.
Create a returns delivery for the sales order when the materials reach your company.
In SAP standard, the system proposes delivery type LR automatically. The transaction is completed by the goods issue posting, which triggers the posting of the goods receipt for the returnable packaging materials to the plant stock.
Result
When the goods issue is posted, the relevant quantity is deducted from the stock balance of the corresponding returnable account and is added back into your free stock at the plant where the goods are returned.
Note
This step is not relevant for billing.