Before You Begin: Assign Information Classification

Stock Rotation Process
APAC Distribution Operations
Gabriel Goh
General Process Information
 Description:
The Stock Rotation Policy allows Distributors to return up to the agreed percentage of
stock shipments from the preceding quarter for credit. Once Stock Rotation requests are
approved, Distributor will be notified of a RMA (Return Material Authorization) and will
subsequently be able to return the product. Once Distributor returns product they shall
wait for the credit memo issued and take a deduction from their payments to Cisco
(except India). Collections will apply corresponding stock rotation RMA credits to the
RMA based on the credit memos issued.
 Scope:
This document is applicable only to the APAC 2-Tier Stock Rotation Return Process.
Process flow includes steps of Stock Rotation request, Approval Cycle, Return Process,
Discrepancy/Variance Handling, and Application of Credit.
Roles and Responsibilities
WWCO Customer Return Team
 Liaison between Cisco and Teleplan
 Establish guidelines for Cisco internal engagement with Teleplan
 Establish and maintain reporting and support requirements
 Point of escalation for Cisco internal
Distribution Operations
 Resolve the escalation related to Stock Rotation claims from the distributor
 Guidance on part(s) eligible for WPL
Channel Finance
 Tracks shipment dollar volume and provides Stock Rotation allowances
 Guidance on re-allocation of claims from Stock Rotation to Obsolete
 Final approval of Stock Rotation claim
Roles and Responsibilities
CS-Ops / GCC
 Process and book RMA requests
 Own the relationship with the distributor’s Accounts Payable to resolve credit disputes
 Investigate and reconcile Distributor's credit claims against credit memos issued by Cisco
Channel Specialist Group - CSG (To be effective Q3FY11**)
 Point of contact for distributor, disti operations, Channel finance, Collection and CS-GCC
 Liaison between WWRL, Customer Returns Team, Teleplan and Cisco disti operations,
Channel Finance and Collection team
 **Remarks: For Q1 & Q2FY11 (before CSG onboard), Disti Ops & Customer Returns team
will cover the role to coordinate with various stakeholders on Stock Rotation Returns issue.
Stock Rotation Policy
 Limited to percentage of the dollar value of Products from the Wholesale Price List
(or, if no Wholesale Price Lists exists for the Distributor’s Territory, then the
applicable Price List) shipped to such entity, net of credits, less returns to Cisco, in
the preceding ninety (90) day period.
 The Stock Rotation percentage allowable is stipulated in the Disti Agreement with
Cisco .
 Credit is based on the original Wholesale Unit Price sale, less off price protection
 e-Delivery item is not intended to be stocked (not included WPL) and shall not be
included in Stock Rotation Returns.
 Distributors are encouraged to claim stock rotation once per quarter.
Stock Rotation Acceptance Criteria
Criteria of stock rotation product:
 Product must be in original packaging with Cisco factory-seal intact.
 Product must be a recognized Cisco part, not a third-party or OEM part.
Acceptances criteria:
 Product returned must be unused and unopened box.
 Product returned must new in the box with a factory seal intact.
 Physical product serial number must be tie in as the serial number reflect on the carton box.
 All approved products must be returned by 30 days from the start date of RMA book date (refer
appendix A) in Cisco system. An aging RMA report will be sent to distributors upon 60 days and
Cisco reserves the rights to cancel any aging RMA once RMA# is over 90 days.
 Products returned that are not within the Stock Rotation approval list will be rejected.
Distributors are required to pick up the rejected products within 21 days upon Cisco’s notice
from Teleplan Hong Kong facility. Freight charges are borne by distributors.
Process Description
Channel Finance calculate the Stock Rotation Allowance on quarterly basis and DCAM is to communicate the
allowance to Disti
Distributor completes request form with Stock Rotation product return information.
See template in slide 15
Distis shall separate the returns from different ship from locations in the application form to allow separate RMA
to be issued. (see Request Form template in slide 15
Distributor sends stock rotation request to DCAM with Subject Heading as Stock Rotation Request -Qx /FYyyCustomer Name
Qx= Q1 for quarter 1, Q2 for quarter 2, Q3 for quarter 3 & Q4 for quarter 4
FYyy= FY10 for Fiscal Year 2010
DCAM emails Channel Finance of the Stock Rotation form & cc copy: [email protected]
WWCO team posts e-mail request and spreadsheet in WebEx Connect Space named “APAC Stock Rotation
Collaboration” under “Stock Rotation Request” sub-folder.
Each stock rotation e-mail request will be filed under the quarter of the respective stock rotation request.
The e-mail request is posted as a “txt” or “html” format and the request form in MS Excel format.
SLA = 24 hours
Channel Finance reviews request form to validate PID#, S/O#, Price & serial numbers.
Is the request approved?
If Yes, proceed to Step 7b.
If No, Channel Finance approver to notify respective disti & proceed to Step 7a.
SLA = 7 working days
Channel Finance to communicate directly with Disti to request for clarifications or modifications.
Notify the Distributor of areas requiring clarification and modification. Distributors will be able to resubmit the request.
If Distributor is resubmitting a new request, proceed to Step 1.
If Distributor is NOT resubmitting a new request, no further action is needed.
Process Description
Channel Finance* approves the request and email to [email protected] the approved form to CS-Ops/GCC
to issue RMA cc copy email alias [email protected]
SLA = 24 hours
Oracle Teleservice case number is auto created and the requester (Channel Finance) is notified of the case
CS-Ops/GCC will review the attached approved stock rotation request form.
CS-Ops/GCC creates a RMA(s) for the approved stock rotation request.
Process one RMA record for each warehouse location/ grouping noted on the Stock Rotation Return Request File.
One RMA will be created for each distributor warehouse grouping on template.
CS-Ops/GCC will then email the RMA number(s) to the requestor (Channel Finance) & cc copy email alias:
[email protected] while email notification is sent to disti from QTC system.
SLA = 48 hours
WWCO team posts the GCC’s email with RMA# to in WebEx Connect Space “APAC Stock Rotation” under the
“Stock Rotation Request” folder.
SLA = 24 hours
Distributor to complete a self audit/check-off of product coming back to Cisco prior to shipment.
Recommended Timeline = 14 days from RMA book date
Process Description
Distributor to adjust their internal record of shipment and send the pre-shipment alert:
ANZ – delivery notice to in-country receiving depot to schedule the delivery window
Rest of APAC - Pro-forma invoice to RMA regional Hub (Teleplan HK) for import license validation to obtain
the green signal to ship.
Disti shall also advise the adjusted RMA to their Finance to ensure their awareness of actual RMA Items shipped
that will be credited.
Pre-shipment alert should be sent to:
a. For Rest of APAC countries (except ANZ)
Cisco Systems International B.V.
c/o Teleplan Service Solutions
Asia B.V.
YKK Building,
15th Floor,
Phase 2
No. 2 San Lik Street
Tuen Mun, New Territories,
Hong Kong
All return shipment must follow below process:
Send pro-forma invoice to [email protected] for Import License verification.
Await for the notification before releasing shipment
Process Description
b. For Australia:
Cisco Systems Australia
C/O TNT Storapart
Unit B3,
2-8 Mcpherson Street
Banksmeadow NSW 2019
Attn: RMA Receiving
Email address:
[email protected] & [email protected]
For New Zealand:
Exel Supply Chain
Highbrook Site 1
103 Kerwyn Avenue
East Tamaki 2013
New Zealand
Email address:
[email protected], [email protected] & [email protected]
All products must be in original packaging with Cisco factory-seal intact.
See the detailed return location at the following URL.
Process Description
Distributor communicates the variances from the original request to the self-audit.
Distributor to update Cisco approved Stock Rotation request template from step 7b (column M to Column Q) to
communicate any changes in Return Quantity and send to WWCO Customer Return team email alias:
[email protected]
WWCO Customer Return team to work with CS-ops/GCC to adjust the quantities on the RMA & post the updated
Stock Rotation request form with self-audit result to APAC Stock Rotation Collaboration Space under the
“Stock Rotation-Self Audit Result” sub-folder.
Note: Variance allows only for cancellation of lines or adjustment of quantities lower on lines. No additions to the RMA
are allowed
SLA = 24 hours
CS-Ops/GCC updates the RMA to reflect the final return quantity as per instruction from WWCO Customer
Return team.
SLA = 48 hours
Distributor returns product to the Receiving Vendor.
Receiving Vendor details: refer to Step 11.
Disti to send notification to confirm completion of shipment to receiving vendor and provide tracking # along with RMA.
Recommended timeline= within 30 days from book date
The Receiving Vendor receives product against RMA.
SLA = 5 business days
Discrepant Parts received?
If Yes, skip to Step 18.
If No, proceed to Step 17
Credit memo(s) will be systematically generated 48 hours following receipt of parts against RMA.
With the exception of India, Distributors can apply these credit memos against their outstanding AR with Cisco.
For India Distributors, Collection Team will process a TT Remittance every quarter. Please see slide 17 to 19 for the
detailed process flow.
SLA = 48 hours
Teleplan logs Discrepant Parts in the Receiving Warehouse Problem Log.
Parts returned that are not listed on the RMA are considered discrepancies and will be quarantined during the receiving
process. A problem log will be created for discrepancies by the Receiving Warehouse. WWCO Asset Recovery
manages all Problem Log cases.
Process Description
WWCO Customer Return Team follows up with the distributor to resolve variances and discrepancies.
Source of truth for variance will come from Problem Log & Receiving Report from Regional RMA hub, which are to be
used to check against the update Stock Rotation request template (with self-audit result) from Distributor to validate what
was received. Discrepancy Reports will be run 5 days from time of shipment received at Teleplan HK facility or in country
receiving location in Australia.
-a new Right Now case is created to document and track discrepancies.
WWCO Customer Return team will work with FSRM to contact Distributor regarding variances.
a. Provide Stock Rotation request template with Self-audit result to Distributor
Discrepancy Scenarios:
1) Overages (Distributor returned unauthorized product against RMA)
Distributor to validate and provide confirmation to send product back along with information (reference #)
that is required in order to receive product in at their warehouse.
2) Shortages (Distributor did not return all authorized product against RMA)
Distributor to validate and advise
a) Confirms to adjust or cancel lines on RMA
b) Disti to provide POD with Serial #’s to validate RMA parts shipped
3) Distributor sent product under wrong RMA / no RMA #
Distributor to provide correct RMA # for Teleplan to receive in.
WWCO Asset Recovery team will need to provide Distributor with Tracking # product came back, Product ID, Serial
#,RMA #.
SLA: 24 hours
Process Description
b. Distributor to reply back to (WWCO / FSRM) with response on variances (SLA: 5 business days)
c. WWCO AR team will address responses, action accordingly and update Right Now case
1) Confirmation to collect overages back –WWCO AR team would notify Teleplan to prepare product for disti to collect
-Proceed to Step- e
2) Confirmation to adjust RMA for shortages – WWCO AR team will request assistance from FSRM or contact the GCC
directly to adjust the RMA
-Proceed to Step-d
3) Confirmation with correct RMA # to receive in – WWCO Asset Recovery (AR) team will need to determine if product
can be received in under correct RMA number
If RMA is open, product can be received in to credit.
-Proceed to step - f
d. The FSRM/WWCO requests adjustment on original RMA for shortages
Contact [email protected] to update and/or cancel lines on RMA
Respond back to confirm that original RMA was updated so case can be resolved.
-Proceed to Step- f
e. Teleplan will make ready to release overages to Distributor for collection.
-Ensure Teleplan release the overage as per record to the distributor
-Update case with POD record and serial #’s of product released
SLA: 72 hours
-Proceed to Step f
SLA: 24 hours
f. WWCO Customer Return team to validate that tangible lines on Stock Rotation RMA are closed and closes
RNT case.
-Send notification to Disti alias that discrepancies have been resolved.
-Close Right Now Case
SLA = 24 hours
Process Description
WWCO Customer Return team to check if all intangible lines are closed. If not, review the open intangible lines
and email to GCC to close out the lines.
-WWCO Customer Returns team will send the mail to the below alias according to the theater with subject line “Release
NR-Credit Hold RMA#XXXXXXX.”
1. [email protected]
2. [email protected]
3. [email protected]
SLA = 48 hours
Collection team reconciles with Distributor for any credit variance & discrepancies related RMA credits.
- Collection will refer to the Stock Rotation Template in the WebEx Connect Space in Step 13 to investigate the
discrepancy between customer's claims & what Cisco has approved. This will be communicated to Disti's Accounts
Payable contact by email.
SLA =72 hours
For Stock Rotation returned from the distributors in India, remittance will be made as per Exception Process –
India Stock Rotation Remittance
See detailed procedures in slides 17 to 19.
SLA= 10 working days
Stock Rotation Template
Example of the Stock Rotation Template
Stock Rotation Returns – For UCS
Stock rotation allowances for UCS products are
separate from Cisco Classic and Small
Business products.
Disti are not to include UCS products into their
normal stock rotation forms. A separate form is
to be submitted.
Stock rotation for UCS products only applies to
UCS products on WPL.
Exceptional Stock Rotation Returns
Cisco will only accept stock rotation returns that are in compliance with
policy and criteria listed in the beginning of the these slides. For any returns
falling outside the Stock Rotation policy and criteria, e.g. Items that have
been opened or used, will only be approved on exception basis.
1. Disti to route their request for Stock Rotation to
[email protected] indicating the reason(s) for exception
2. Disti Ops/WWCO/Disti Finance to review and decide on whether request is
approved or denied.
•Business Approval from Disti Ops team
•Business Approval from WWCO Customer Returns Team
•Finance Approval from Disti Finance
Exception Process – India Stock
Rotation Remittance
 Rationale for Exceptional Process for India Distis
According to feedback from India Distis, Credit Memos issued for Stock Rotation
cannot be used to contra against the AR owed to Cisco without prior consent from
RBI as per RBI guideline below:
Reserve Bank of India Notification No. FEMA 23/2000-RB Dtd 3rd May 2000 under
the Foreign Exchange Management (Export of goods and services) Regulations,
2000, Para 14 - C outlines the provisions pertaining to adjustment of exports
against imports:
 Counter Trade
Any arrangement involving adjustment of value of goods imported into India against
value of goods exported from India, shall require prior approval of the Reserve
 Implication for Cisco:
- Cisco can engage an external legal counsel to apply to RBI for exception to the
above but legal fees could be in excess of US$ 10K with no guarantee of success.
- Hence, Cisco Channel Finance and Collection Team have collectively agreed to
an exceptional process to process remittance for Stock Rotation credit memos for
India Distis.
Exception Process – India Stock
Rotation Remittance
 CID/BID to be used for processing Stock Rotation
Ingram Micro India
Redington India
CID 555559409
CID 555547442
BID 120801140
BID 121337629
* Both Distis are enrolled in the Cisco Capital Extending Financing
Program under GE.
To ensure that Stock Rotation Credit Memos can be paid out by Cisco as
a Remittance, the credit order must be loaded to the above Open Terms
* This is updated in Customer Specifics for the above Distis to ensure CS
book the credit order using the correct BID
Exception Process – India Stock
Rotation Remittance
 Refund Process
Collection Team will process SR Refund on a quarterly basis
5 working days
1. Run Oracle Statement of Accounts on the SR CID/BID
2. Obtain list of SR Credit memos from shared drive
3. Reconcile list of open Credit Memos.
Ensure that:
- All SR Credit Memos are still in Open status
- All SR RMA are closed and there's no more outstanding Credit
4. Complete Special Payment Request Form (SPR) &
Collection Payment Request (CPR)
Month 3 Week 5. Obtain approval
6. Submit Cash Application & Remittance Request to AR Team
7. Notify Disti once Accounts Payable has processed the Remittance &
attach list of SR Credit Memos processed
* If Remittance Advice is required, Collection has to log a case &
from Accounts Payable
8. AR apply SR Credit Memos in Oracle & submit Remittance Request
2 working days
Accounts Payable (AP). AR open Case Id with AP
9. AP process remittance and release payment to the Bank
2 working days
10. Bank credit customer's account
1 working day
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