Solved: please explain consignment order?

Former Member · ‎02-01-2009

please explain consignment order?

Former Member · ‎02-02-2009

The consignment process in SAP standard consist of four small processes:

Consignment fillup (send materials to customer consignment).

Here you have a consignment fillup order and a consignment fillup delivery.

Consignment issue (issue materials from customer consignment to the customer).

Here you have a consignment issue order, consignment issue delivery and a consignment issue invoice. (the flow is very similar to a normal OR flow, but the materials are issued from the consignment stock instead of plant stock unrestricted).

Consignment return (return materials from customer ownership to customer consignment).

Here you have a consignment return order, consignment return delivery and a consignment return invoice. (the flow is very similar to a normal RE flow, but the materials are returned to the consignment stock instead of plant stock returns).

Consignment pickup (pickup consignment stock and move it to plant stock).

Here you have a consignment pickup order and a consignment pickup delivery.

Note that in consignment fillup and consignment pickup there are no invoices since there is no change of ownership for the materials.

How to perform a consignment order?

In consignment orders you are allowing the stock to sit in your customer location. Once he informs that he used the stock you will invoice him. If he returns the stock you will accept the stock to take it back.

It is defined in 4 steps.

1. Consignment fill up:

Sales document type is KB

Item category KBN

shedule line category E1

In this step, you are not invoicing the customer. document flow is sales order -

delivery item category. It will not be relevent for billing and pricing because you are not charging money for these goods in this step.

In schedule line category, you will set movement type 631 & set for availability check and TOR.

2. Consignment Issue.

Once the customer informed you that he used all the goods or partial goods then you will create consignment issue for used goods.

Sales document: KE

Item category: KEN

shedule line category: C0 or C1

Here you are invoicing the customer(because he used the goods). you are assigning the delivery documnt and billing document to the sales document.

In item category, you are setting relevent for billing, pricing, special stock.

In schedule line category, your setting is 633 movement type, relevent for availability check & TOR.

3. Consignment Return:

Customer found that some goods are damaged or he not able to sold the goods he want to send it back. that you are creating this document.

Sales document type: KR

Item category: KRN

Shedule line category: D0

You will assign delivery document and billing to sales document. you will create return order, return delivery, return billing.

Your setting item category relevent for billing, returns, pricing, special stock.

Your setting schedule line item category: 634 movement type, NO availability NO TOR.

4. Consignment Pick up:

Even if you create the consignment return the goods are not come to direct to your plant. For that you need to create consignment pick up. here the owner ship is not changing so you do not need to create billing.

Assign retrun delivery to sales document type.

Sales document: KA

Item category: KAN

schedule line category: F0 & F1

Your setting item category relevent for returns. any shedule line category relevent for 632 movement type, MRP, availability check, delivery.

Now you check your plant stock. Stock will increase.

Lakshmipathi · ‎02-02-2009

Dear Sandesh

Please make a search in the forum as this topic was discussed many times.

thanks

G. Lakshmipathi

former_member550050 · ‎02-01-2009

Hi

Consignment process is basically of four different types

Consignment process basically we are doing because there is no confirmed requirement from the customer and we send our stocks to the customer thinking that he will use it so that we can make a sale

When a company introduces new products there is no demand for those products so the dealers will not buy it

This is one such occasion the company uses this consignment process and sends the goods the dealers on consignment and simultaneously market these products and slowly build the demand from the consumers so that dealers start selling these consignment stocks and the whole cycle goes on and after sometime when these new products's demand is estabilished then the company start practising the normal sale order process

Consignment Fillup -

>This means that we are sending goods to our customer say material X say 100 units This remains our vaulated stocks but at customers place (thinking that the customer will with draw something from that qty so that we can make a sale) Since it is our stocks this is not relevent for Commercial billing

Consignment Issue -

> If out of this 100 units if the customer withdraws 60 units this is Consignment Issue and this is billable we make commercial billing for this customer for 60 units

Consignment Pickup -

>The balance 40 units we take it back through Consignment Pickup and this is not relevent for billing

Consignment Returns -

> Out of this 60 units which was sold thro Consignment Issue if your customer returns 5 units that is Consignment Returns and this is billable that is credit note issue

When you make a consignment fill up for a customer if you check the stocks in MMBE these 100 units will be in a special heading called customer consignment under that customer's name

In this WIKI section of SDN there are some excellent odcumentation on consignment Process and i have pasted herewith one such document for you to read and understand

Conginemt process is keeping the stock in customers premises, but until the constomer consumes or sell it, it will be a part of the company. (It is not mandatory that we should stock the consignment stock in the customers premises, we can store it in the company premises too).