Consignment Scenario

[Former Member]

Hi all,

Can any one explain consigment scenario. Step by step by procedure would be help.

Thanks.. Damodar

[Former Member · Accepted solution]

Dear,

Customer Consignment is a form of business in which the vendor maintains a stock of materials at a customeru2019s location. The vendor retains ownership of the materials until they are withdrawn from the consignment stores. The customer is only charged for product once it is reported as used at which time it is deleted from inventory.

There are four standard SAP document types:

(KB) Consignment Fill-up: Sends stock from storage to Customer Consignment.

(KA) Consignment Pick-up: Returns stock from Consignment to Storage.

(KE) Consignment Issue: Charges the customer and Removes from Consignment.

(KR) Consignment Returns: Credits the customer and returns to Consignment

The process steps for each one above are availabel at :

http://esoadocu.sap.com/socoview(bD1lbiZjPTgwMCZkPW1pbg==)/render.asp?packageid=DBBB6D8AA3B382F191E0...

With a Consignment Fill-Up document (type KB), stock is physically sent to the customer (VA01 to vl02n) but no billing is done because the stock is still owned by the Vendor.

Once used, a Consignment Issue (KE) document type is processed with VA01 (and a "virtual" Delivery is processed) which removes the stock from Consignment stock and Bills the customer (VF01).

If a customer is billed for stock which was not really used, a Consignment Return (KR) is created with reference to the Issue (KE) which puts the materials back into Consignment stock and gives the customer credit.

If products that are in Consignment stock are found to be damaged or no longer needed then a Consignment Pick-up (KA) is created to move the stock from Consignment back to stock (no credit is issued because the customer was never billed).

Whatu2019s the difference between a Consignment and a standard Sales Order?

Sales Orders (and Returns) move product out of (and into) Inventory.

Consignment Fill-up and Pick-up move products but they remain in Inventory.

Regards,

Syed Hussain.

Edited by: Syed Hussain on Sep 21, 2008 12:28 PM

[Former Member · Accepted solution]

hi

thanks for explaining customer consignment scenario.But i would like to know about vendor consignment.

kindly explain me.

Regards

Damodar.

[Former Member · Accepted solution]

Dear,

Consignment is a functionality in MM-PUR wherein you purchase materials from the vendor on a consignment-basis. When the delivery comes, the materials, though will be stored in your warehouse, are still legally owned by the vendor until they are consumed, i.e. GI posting (this is the only time you will be liable to the vendor).

You just have to make sure, you set up the following to run this function perfectly:

1. Maintain account determination

KNO G/L acct: GR/IR Clearing

AKO G/L acct: Inventory account

2. Check field status compatibility at G/L account, posting keys in the IMG or run SE38/RM07CUFA to display fields compatibilities.

3. Set up output condition type KONS.

4. On the material master record, set special procurement indicator to 10 (consignment) at MRP2 view.

5. Create Info record for the consigned material and vendor-consignor. Be sure the info category is Consignment.

For info:

http://help.sap.com/saphelp_erp2005/helpdata/en/c6/af3c415e5dde2be10000000a1550b0/content.htm

Regards,

Syed Hussain.

[pankaj_singh9 · Accepted solution]

Hi,

For Consignment Process, you need to maintain the Consignment Info Record in ME11. Here maintain the Prices and Tax Code mandatory (Before this activate Consignment Info Record in OMEV )

Also in SPRO > Enterprise Structure > Assignment > Materials Management > Assign standard purchasing organization to plant

Then create Consignment PO in ME21N with Item Category as "K", here No Price will be maintained

Do Goods receipt w.r.t. PO in MIGO to Vendor consignment stock (At this time No FI Entry will get generated)

Do Transfer posting of vendor consigned stock to own stock using 411 K in MB1B. At this time system will pick up the Price from Consignment Info Record and post the Accounting Document. Here following FI Entry will appear;

(BSX) Stock A/c - Dr
(KON) Consignment Liabilities - Cr

Now do Consignment Settlement in MRKO. Here you can not change the Invoice Value. Here following FI Entry will appear;

Vendor A/c - Cr
Consignment Liabilities - Dr

Prerequisite for MRKO: -

- Maintain condition record for output type KONS in MRM1

Then take printout of the Settlement Document in MR91.

[Former Member]

Consignment

Use

In consignment processing, the vendor provides materials and stores them on your premises.

The vendor remains the legal owner of the material until you withdraw materials from the

consignment stores. Only then does the vendor require payment. The invoice is due at set

periods of time, for example, monthly. In addition, you can also arrange with the vendor that you

take over ownership of the remaining consignment material after a certain period of time.

Features

The consignment stock is managed under the same number as your own stock.

Consignment stock can, therefore, be transferred to the available stock.

You can define consignment prices in foreign currency. The currency in which the order

is placed with the vendor applies for consignment withdrawals.

You can determine period-specific consignment prices.

You can specify the consignment price in any unit of measure. The conversion factor is

stored in the info record.

Using consignment info records, you can make use of other condition functions used in

Purchasing, such as discounts and price quantity scales.

Consignment stocks of the same material from different vendors can be managed

independently from one another and at the price of the individual vendors.

Consignment stocks are not valuated. When the material is withdrawn it is valuated at

the price of the respective vendor.

A consignment material can be allocated to one of three stock types:

Unrestricted-use stock

Quality inspection stock

Blocked stock

You can make transfer postings between these three stock types.

Pricing for Consignment Stocks

Pricing for Consignment Stocks

Use

Before you can order a material from a vendor or post a goods receipt to consignment stock, you

must maintain the consignment price for the vendor in an info record. The price is required for

material valuation and accounting purposes.

If you order consignment material from several vendors, the system maintains the consignment

stock separately for each vendor, since the individual quantities of the material can have different

prices with each vendor.

4711

Quantity:

Price: 1.30

800 pc

$

Miller

Quantity:

Price: 1.50

700 pc

$

Consignment

material from

vendor Smythe

Quantity:

Price: 1.60

900 pc

$

Pytcher

Material Material

Material

Material

Consignment

material from

vendor

Consignment

material from

vendor

Activities

Creating Info Records for Consignment Stocks

To enable you to create an info record for a material, the material master record must already

exist for the plant concerned. To create an info record, choose Master data Info record

Create. Maintain the data as required and save the info record.

Creating Purchase Requisitions for Consignment Material

You enter purchase requisitions for consignment materials in exactly the same way as for other

materials.

You accept the order category (such as NB) that the system proposes as a default and enter the

item category K (for consignment).

Creating Purchase Orders / Outline Agreements for Consignment Materials

The procedure for creating consignment orders is the same as for standard purchase orders or

outline agreements. However, you must note the following:

Enter the item category K for the consignment item. To ensure that the goods receipt is

posted to the consignment stores and an invoice receipt cannot be generated for the

item.

Do not enter a net price.

Stock Movements for Consignment Material

Use

This section describes the different movement types for consignment material.

Posting Goods Receipts for Consignment Material

Goods receipts to your consignment stores can either:

refer to a purchase order or

be made by the vendor directly without a purchase order

The posting procedure differs slightly.

A goods receipt to consignment stock is possible for three stock types:

Unrestricted-use stock

Quality inspection stock

Blocked stock

Goods Receipt With Purchase Order

If a purchase order exists for the consignment material delivered, enter a goods receipt as

follows:

1. From the Inventory Management menu, choose Goods movement Goods receipt

For purchase order PO number known. The initial screen is displayed.

2. Enter the number of the purchase order to which the goods receipt refers. You can also enter

the plant and storage location.

3. Select the movement type with Movement type PO to warehouse.

Press ENTER to display the item overview.

4. Select the items you wish to process and check the quantities delivered. If required, enter a

stock type in column S. Copy (adopt) the selected items.

5. Post the goods receipt.

Goods Receipt Without Purchase Order

If the vendor's goods receipt is not based on a purchase order, proceed as follows:

1. Choose Goods movement Goods receipt Other from the Inventory Management

menu.

2. On the initial screen choose Movement type Receipt W/o purchase order To

consignment unr. Enter the plant and storage location. Press ENTER to display the collective

entry screen.

3. Enter the number of the vendor.

4. Enter the number and quantity of the consignment material.

5. Post the goods receipt.

Updating Consignment Stock

After a goods receipt for consignment material has been posted, the consignment stock of the

material increases. The consignment stock is available for MRP.

However, the material's valuated stock does not increase since the consignment stock still

belongs to the vendor.

Displaying Consignment Stock

Use

You can display data for consignment stock using the following functions:

Display consignment info record

Display the stock overview

Display consignment stocks

Activities

Display consignment info record

From the Purchasing menu, choose Master data Info record Create. Maintain the data

on the initial screen and choose Continue.

Display the stock overview

In the stock overview you can display the consignment stock of a material for all vendors. In

addition, all the other stock types (for example, own stock) are displayed.

From the Inventory Management menu, choose Environment Stock Stock overview.

Maintain the data on the initial screen and carry out the evaluation.

An overview is displayed of your own stock and the consignment stock according to your

selection criteria.

If consignment stock exists, the line Vendor consignment is displayed for the relevant storage

location. Select this line to display detailed information on the consignment stock.

Display consignment stocks

This function allows you to display the consignment stocks of more than one material at the same

time. From the Inventory Management menu, choose Environment Consignment Vendor

consignment Stock. Maintain the data on the initial screen and carry out the evaluation.

Goods Issue from Consignment Stock

Use

You can only post a goods issue from consignment stock to consumption if the material belongs

to unrestricted-use stock. If the consignment material is in quality inspection or blocked stock,

you must first transfer it to the unrestricted-use stock.

Activities

Choose Goods movement Goods issue. Enter the data as required, including movement type,

account assignment object, and vendor.

After the goods issue, the vendor is due the net value of the goods issue.

Transferring Consignment Stocks

If, for example, you want to transfer consignment material within a plant from one storage

location to another, proceed as follows:

1. From the Inventory Management menu, select Goods movement Transfer posting. The

initial screen is displayed.

2. Enter the plant and the issuing storage location. Choose Movement type Transfer

posting Consignment SLoc unre. to unre. (Storage location unrestricted to

unrestricted). It is also possible to transfer quality inspection stock or blocked stock.

3. Press ENTER. The collective entry screen appears.

4. Enter the following data:

u2013 Receiving storage location

u2013 Vendor

u2013 Material

u2013 Quantity

5. Post the stock transfer.

The transferred quantity is now managed in the consignment stock of the receiving plant.

Managing Special Stocks (MM-IM) SAP AG

Transferring Consignment Material to Another Stock Type

22 April 2001

Transferring Consignment Material to Another Stock

Type

If you posted the consignment material to the quality inspection stock or blocked stock, you must

transfer it to the unrestricted-use stock before it can be withdrawn.

To transfer a consignment material from one stock to another, proceed as follows:

1. From the Inventory Management menu, select Goods movement Transfer posting. The

initial screen appears.

2. Enter the plant and storage location. Choose Movement type Transfer posting

Consignment and then the stock type (for example, Ql to unrestricted).

3. Press ENTER. The collective entry screen appears.

4. Enter the following data:

u2013 Vendor

u2013 Material

u2013 Quantity

Only enter a receiving storage location if the material should be stored in another storage

location.

5. Post the document.

The consignment material is now managed with a different stock type.

Transferring Consignment Material Into Own Stock

Prerequisites

Supposing you agreed with the vendor that after six months you will take over ownership of the

remaining consignment stock. To do this, carry out the following goods movement:

Procedure

1. Choose Goods movement Transfer posting. The initial screen appears.

2. Enter the plant and storage location. Choose Movement type Transfer posting

Consignment Consignment to own. (Movement type 411 with special stock indicator K)

3. Select Continue. The collective entry screen appears.

4. Enter the vendor, material, and quantity. Only enter a receiving storage location if the

material should be stored in another storage location.

5. Post the document.

Result

The transfer results in a liability towards the vendor.

Settling Consignment Liabilities

Use

Removing material from consignment stores or transferring material to your companyu2019s own stock

results in liabilities towards the vendor. You should settle these liabilities at regular intervals.

Consignment materials are settled without the vendor issuing an invoice, as the vendor company

is unable to track withdrawals directly. The vendor can only manage its consignment stock by

taking deliveries and payments into account.

You can initiate payment for consignment withdrawals using the Logistics Invoice Verification

application component.

Physical Inventory of Consignment Material

This section explains to what extent the physical inventory of consignment material differs from a

standard physical inventory. You start from the physical inventory menu.

ake a physical inventory by:

creating a physical inventory document

entering the physical inventory count

posting inventory differences

Creating a Physical Inventory Document

This section explains how to create a physical inventory document. The inventory document is

used as a work sheet for the warehouse count and as a basis for further physical inventory

transactions.

1. From the Physical Inventory menu, choose Phys. inventory document Create. The initial

screen appears.

2. Fill out the initial screen. Enter k in the Special stock field.

3. Press ENTER. The item overview is displayed.

4. Enter the vendor and all the materials that are to be counted. If you want to include the

quality inspection stock or blocked stock of a material, enter a new item for the material

number and enter the relevant stock type in the field STy (Stock type).

You can enter materials for another vendor by choosing Edit New items. On the

screen for entering new items overwrite the entry in the field Vendor.

5. Post the document.

Entering the Physical Inventory Count

This section explains how to enter the results of the warehouse inventory count into the R/3

System.

1. From the physical inventory menu, choose Inventory count Enter. On the initial screen

enter the physical inventory document number.

2. Press ENTER and enter the counted quantity for each item on the next screen.

3. Post the document.

Posting Inventory Differences

After entering the count, you must post the differences between the stock in the R/3 System and

the counted stock. To do this, proceed as follows:

1. Choose Difference Post.

2. Enter the document number and press ENTER. The difference quantity is displayed.

3. Post the document.

Thanks

Anand

Edited by: anand k on Sep 22, 2008 11:08 AM

[former_member335885]

Hi ,

1) Create a Purchase Information Record with Consignment category / type.

Maintain the Net price and tax code in PIR.

2) Create a Purchase Order with ME21N and save.

3) Make a GR for the Material

4) Bring the Consignment stock into Unrestricted Stock using MB1B trxn code use 411K.

5) Maintain condition record for Output in MRM1 trxn code.

6) Settle the Vendor Consignment in MRKO trxn code. Just give Vendor and select the Consignment option and in Processing tab select display opton and execute.

7) Once you confirm that the MRKO trxn is showing correct information in diaplay mode, then change processing mode to Settle mode and execute.

Revert back in case any doubts.

Thanks & Regards,

Kiran