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Stock Rotation Process Details

Stock Rotation Process Details. APAC Distribution Operations Gabriel Goh. General Process Information. Description:

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Stock Rotation Process Details

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  1. Stock Rotation Process Details APAC Distribution Operations Gabriel Goh

  2. 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.

  3. 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

  4. Roles and Responsibilities CS-Ops / GCC • Process and book RMA requests COLLECTIONS • 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.

  5. Stock Rotation Policy 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 paid. • 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.

  6. 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.

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  15. Stock Rotation Template • Example of the Stock Rotation Template

  16. 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.

  17. 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. • Process: • Disti to route their request for Stock Rotation to apj_sr_core_team@cisco.com indicating the reason(s) for exception • 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

  18. Exception Process – India Stock Rotation Remittance • Rationale for Exceptional Process for India DistisAccording 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 Bank • 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.

  19. Exception Process – India Stock Rotation Remittance • CID/BID to be used for processing Stock Rotation Ingram Micro India　　　 CID 555559409　 BID 120801140　　　     Redington India　　　　  CID 555547442      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 BID. * This is updated in Customer Specifics for the above Distis to ensure CS book the credit order using the correct BID

  20. Exception Process – India Stock Rotation Remittance • Refund Process

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