Purpose
One of VCCS main objective for the aftermarket is to support customer satisfaction. In order to do this high part availability is necessary together with stock holding policy at all levels and a possibility to return parts. The possibility to return parts is therefore a part of the business offer to Volvo customers.
To accept returns is a part of the VCCS offers to support customer satisfaction and also to take responsibility for deviations.
The aim is that where ever a Volvo customer is located they should have the same possibility to return a part. This global strategy defines guidelines for returns to assure an optimum balance between immediate availability at dealer, total VCCS inventory and distribution costs.
It is a must that the "VCCS Quality & Packing rules for returns" are being followed for all returns.
Scope
This Return Strategy is for VCCS and for its customers worldwide. Customers are defined in this document as Sales Companies, Importers and Dealers/Retailers.
Definition - What is a return?
A return is a VCCS sold product/part that is requested or accepted to be sent back to VCCS. A part is defined as a part, accessories or exchange sold by VCCS.
A return situation can occur for different reasons and there are four different kinds of returns:
1. Quantity or quality deviations caused by VCCS (received wrong part, incomplete kit, damages etc.)
2. Part ordered in error by the customer
3. Part requested by VCCS
4. Buyback
VCCS aim to limit the need of returns. To reduce number of returns VCCS continuously work with improvements in the parts catalogue, picking quality and packing quality. In order to improve customer order behavior and to cover some of VCCS return costs there are different charges for different kind of returns. The customer responsibility is to give appropriate training to the parts and service personnel to reduce ordering errors and buybacks.
To identify the reason for a return there are different codes to use. For more information see the "Discrepancy Reason Codes" document.
Quantity and Quality deviation caused by VCCS
Quality is one of Volvos core values; therefore it is of high importance that all deviations noted must be reported into the discrepancy report system (PULS, VIPS, Volvo Vision).
Part ordered in error by the customer (code 72)
A customer has the possibility to return a part that was ordered in error. There is a minimum line value, a handling fee and a time limit to consider when a code 72.is made. There are also certain parts that.need
Parts requested by VCCS
Sometimes VCCS requests a return for a part needed for a VOR order. Either the part can be delivered direct from one customer to another at VCCS request or returned to CDC.
Buyback
Customers that meet certain stock management requirements or take part in an activity to improve the logistic handling and purchase routines are eligible to make buybacks. These requirements are set by the Sales Company, Sales Region or VCCS if Importer with an agreement with VCC. The purpose of the buyback return is to help the dealer to decrease parts in stock and reduce the number of non/slow-moving parts.
Return transports
All returns are sent back to CDC Gothenburg, NDC (National Distribution Centre) or LDC (Local Distribution Centre). Some returns to CDC are sent via a return terminal. When returning parts there are specific Return case labels that should be used for each destination.
Observe that it is important that all cases for one return permission are sent with the same shipment.
Freight charges
All freight cost is being paid by VCCS except for non DDU markets where buybacks and code 72 are being paid by the customer/market. For most of the markets there is a return pick up and transport contracted by VCCS which can be used by the market.
Returns – Rules and regulations
Minimum line value
There is a minimum line value requirement (the total value of the line) on code 72 and buybacks as this should not exceed the general cost of transporting and handling this return.
Credit
When the return has been delivered back to VCCS, inspected and approved a credit note is being issued. All returned parts should be in resalable condition and fulfill the "VCCS Quality & Packing rules for returns" to get a credit. There will be NO credit if the part does not fulfill these conditions.
If a part with code 12 and 22 is not returned within the agreed lead-time an additional invoice will automatically be issued.
Handling fee for code 72 and BB
To improve order behavior and to create an awareness of the cost of handling and to transport returns there is a handling fee for customer orders in error, code 72, and buybacks, code 98.for Sales Companies. :
If VCCS charge a certain fee to the Sales Company it is very important that this fee is being charged further to the customer that caused this return just to get the right effect of that fee. Link to Fee Matrix for Returns, VCCS
Return of return fee
If a returned part is not according to the "VCCS Quality & Packing rules for returns" the part will be sent back to the customer and the customer will be charged a “return of return” fee according to the Fee Matrix for Returns, VCCS This is a general fee that should cover the cost of the return transport.
If VCCS have an agreement or find it unnecessary to return it (due to the part is in bad condition and/or high freight cost), VCCS will contact the customer and ask for permission to scrap at VCCS premises, in this case no credit note will be issued.
TMA Returns
Parts not accepted by TMA will be sent back to the dealer and will be charged a “Return of Return” fee according to the Fee Matrix for Returns, VCCS This is a general fee that should cover the cost of the return transport.
Parts NOT accepted for returns
All returned parts must fulfill the quality demands. These are described in the document "VCCS Quality & Packing rules for returns". All returns will be subject to a quality inspection when arriving to VCCS. If a part deviates from these rules it will be returned to the customer (see “Return of return” fee).
Hazardous material/dangerous goods are restricted to transport and all international regulations, directions and national legislations must be followed.
* For entitlement to return hazardous goods the customers must have the competence to follow the legislations stipulated. This needs to be confirmed to Volvo before the ability to return dangerous goods can be granted. Until this, hazardous material is not accepted for returns.
If there is an approved return permission for dangerous goods the customer is responsible to follow the shipping regulations (more information could be found in the document Return of dangerous goods, suplement to VCCS Return Strategy.
If hazardous material is accidently returned (no approved return permission) the parts will not be credited or returned back to the customer.
Due to quality and legal regulations there are some parts that won't be acceptable for return (marked with X in column "Not acc." In the below matrix). Other parts are not accepted for parts ordered in error or buyback (marked with X in column 72 and BB).
Non-returnable parts include the following product categories:
Parts / Not acc. / 72 / BB / ReasonAirbags & Inflatable curtains / X* / X / X / Classified as hazardous materials/dangerous goods. * To be entitled to send goods the customers must have the competence to follow above mentioned. This will have to be confirmed to Volvo before ability to return.
Batteries / X* / X / X / Classified as hazardous material. Partly handled through a direct-delivery program. * To be entitled to return such goods the customers must have the competence to follow above mentioned. This will have to be confirmed to Volvo before ability to return.
Broken sealing on sealed parts (e.g. electronics). / X / X / The quality of the part can't be guaranteed why not accepted for return on code 72 and BB.
Chemicals, flammable liquids, paint, aerosols etc. / X / X / X / The products have a best before date why a buyback is prohibited. To be entitled to send goods the customers must have the competence to follow above mentioned *process. This will have to be confirmed to Volvo before ability to return.
Classic Parts / X / X / X / Classic parts are low frequent parts for older cars and are not stored by VCCS. Not applicable for NDC markets.
Cores / X / X / X / Cores should be return in the ordinary exchange/core flow and is not a part of this return strategy.
Keys & locks (coded keys, coded locks and pre-cut keys) / X / X / X / Mostly handled through a direct-delivery program. Customized for a certain car.
Packing material / X / X / X / Volvo cardboard boxes etc. Due to aging reasons these are not acceptable for BB.
Painted bumpers / X / Direct delivery concept. A painted bumper should have been ordered for a certain customer and should not be put on stock why BB is not acceptable.
Parts bought by meter / X / X / Customized by a certain customer why scrap.
Replaced parts / X / During the time at customer stock this part could have been replaced why not acceptable for a return on BB.
Seat belts / X* / X / X / Classified as hazardous material. * To be entitled to send goods the customers will have to have the competence to follow above mentioned. This will have to be confirmed to Volvo before ability to return. Non pyrotechnic seat belts could be returned after agreement with the sales company/export coordinator (using code 92).
Service Campaigns / X / X / In order to make a high level of customer service and to prevent shortage of parts the Importer/Sales Company is responsible not to order more material then needed in conjunction with service campaigns and recalls. No returns of surplus parts if order exceeded the need.
Tools / X / Not subjects for return.
Tyres / X / Due to that rubber ages not acceptable for BB.
VOR-order / X / Ordered for a certain reason for a higher cost for Volvo.
Direct delivered Winter Wheels. / X / X / Winter Wheels delivered from McSyncro will not be accepted on code 72 or BB code 98**
** Return of Winter Wheels – Follow the link for instruction
Lead time for claims and returns
The lead time for a return from customer to bin at Volvo should be as short as possible so the part can be available for others to order. A short lead time will:
+ Increase the availability
+ Increase the parts and packaging quality
+ Decrease the risk that the parts get old and superseded
+ Decrease the risk that the parts get damaged/dirty
There are certain deadlines for the customer to fulfill for returns. Discrepancies should be reported in the system immediately after parts arrival.
Lead time 1:
The deadline for filing a discrepancy claim / report correspond to the total lead time (actual transportation & invoice time and a handling time at the customer) and are therefore different for each market. Please contact your sales company or VCCS for detailed information in your market.
Lead time 2
The validity of the return permission is the time from when the customer has got the return permission to the time when the return arrive to the closest return terminal (GB, FR, ES, IT, NL, DE, FI, NO, AT, JP, US, CA, AU and CDC). The time for the return permission validity correspond to the total lead time (actual transportation & handling time at the customer) and are therefore different for each market. Please contact your sales company or VCCS for detailed information in your market.
VCCS order office is responsible to set these lead times for each market/region together with the Sales Company / Sales Region.
Returns for a LDC-dealer
Returns from a LDC customer are different due to the fact that the LDC mainly holds the customers stock. The LDC acts on behalf of VCCS and follow the same procedures.
Termination buyback
A termination buyback are defined as returns outside the normal return flow due to for example closing of a customer.
For each termination return there must be an agreement between VCCS, the Sales Region / Sales Company and the customer regarding circumstances, volume, minimum line value and timing.
All involved in this process has a mutual responsibility to avoid VCCS financial losses and unnecessary work in CDC that may disturb the normal return flow.
The Sales Region / Sales Company must always take action to reduce the returned volume as much as possible. This could be done through:
- preplanning, in order to reduce the dealer stock
- Offering high frequent parts and accessories to other Dealers/Importers etc.
The rules for these termination returns are different to normal buybacks the difference are the following:
- Credit and minimum line value as agreed.
- The sales company (if any) and the customer has the responsibility to check that the return meets the "VCCS Quality & Packing rules for returns". If the goods do not meet the quality requirements VCCS will scrap the parts and no credit will be paid by VCCS.
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