consignment process

[Former Member]

Hello ppl,

I have a question about consignments,

1. While we are creating, a consignment fillup, we create a delivery and make a post goods issue, but that is not relevant to billing, so it means that .. in this step we are moving the goods from our warehouse to the customers warehouse, but he is not using it now, and thats y we are not billing him, but there is a DELIVERY AND PGI involved...

2. While creating a consignment issue, this is relevant to billing, but my question, here why do we have to create a DELIVERY AND PGI ???? and another question is that.. is this a dummy/fake delivery ?? PGI here refers to goods movement .. I guess ???? So, please help me understand why a delivery and a PGI are needed here .. and how is the delivery taken as dummy/fake ?? is it because of the order type that is used ??

Also, similar questions with the consignment returns.

Please help me out with this issue.

Thanks

[Former Member]

hello raj

hope u are a bit confused with this logic , i hope the blow explanation may clear your doubts

1.In the consignment fillup we are delivering the goods to the consignee's site.(from warehouse) so there involves delivery,picking and goods issue. this will be indicated by the movement type 631 .As there is no sale, this transaction is not relevant for billing.Still the ownership lies with the company

2.Coming to consignment issue, here the sale of goods occurs at the consignee place and the transaction is relevant for billing. so indirectly we are delivering the goods to the customer. so we will do delivery without picking involved as there is no stock with the company. This transaction is relevant for availability check and also TOR is carried out.for updating accounts i think we will do like this .whereever billing is involved the delivery doc should be created prior to that as per standard sap

hope the information may be of some help to you. kindly reward points if you think so

regards

[Former Member]

Hi Malhothra,

In consignment fill up following things will happen

1) physical movement of goods to customer site and hence deliver document creation

2) Ownership of goods has not changed.Though the goods are lying at the customers place still compny holds the ownership of that particular consignment.Hence no billing in this case.

In consignment issue following things will happen

1)inventory levels come down by the quantity that has been sold by the consignment partner and so now ownership has changed to consignment partner and indirectly we can assume that sale has happened and so we have to bill the consignment partner for the quantity that has been sold by him

2)so this sales has to be tracked for inventory and for some more accounting purposes which can be done along with combination of movement type and valuation class.As you rightly said here there will not be any physical movement.

and also the cosignment issues is following delivery related billing and so if at all you have to create the same u have to create the logical delivery.followed by billing.

i guess now ur level of understanding on this issue would have gone up.

with regards

ravi kiran

[Former Member]

Hi Raj,

GO thr the below link : http://help.sap.com/bestpractices/BBLibrary/Documentation/J54_Scen_Overview_EN_US.pp

Reward if it helps

Regards

Srini

[Former Member]

Hi Raj,

Make the thread answered if you r satisfied with the replies.

Mohan

Award points to the replies.

[Former Member]

Hey Raj,

I Guess you haven't got the answer...........right?

Basically the process of consignment is to allow the customer to use the stock at his will, considering the less demand in the market than supply. So business gives him the option to consume stock at his will and reserves it at customer's or own premise.

When we create consignment fillup we basically reserve this stock for consignment and that is why no billing though the delivery. But as he consumes and we create the consignment issue its the actual sale so we deliver ( from consignment stock) and bill.

Ask if any problem is there

amit

[Former Member]

Hi amit,

I have been getting partial answers.. and as what was mentioned in the earlier posts, I thank all the ppl for the information, but I was a little confused about the delivery part, I am pretty clear as to why a billing is/isnot involved in issues and fillup. And if we are creating a delivery in the system, although it is not physically done, it is just for accounting and the customer would not recieve any bill of lading or any of the other Delivery related documents in the case of ISSUE , am I right ? Please let me know.

Thanks

[Former Member]

hi,

consignment process when we done the c.fillup the stock will up maintained as reserved stock, after customer confirmed the stock consumption we have to reduce the stock level from original qty to actual qty.thats why even in cissue also we have to create delivery,pgi.where its not relvent for picking.....why bcoz stcok will be maintained in ur plant only as reserved stcok...........

cfill-up 1000 pcs.

consumed stock 500 pcs. so we have create the s order for 500 pcs and delviry and pgi and then create f2 billing.........then only 500 pcs will reduced from total stcok and it will be posted in a/cng ledger as cost of goods sold...

so i think you can get it...

still if u have any doubt post message...............

thanks,

hari shankar.

[Former Member]

In consignment issue there will be no pick up .

Hope this adds information.

Mohan

Award points if it helps.

[Former Member]

yes

[Former Member]

hi

the system information to the company for acconting purpose

[Former Member]

So does it mean that although a delivery is created, I understand that.. in reality there is nothing physically delivered while an ISSUE is done, please let me know if that is right ?

[Former Member]

hi

<b>in consignment fill up :</b> delivery goods moves to customer end - No payment action

<b>in consignment issue :</b> stock reduces the customer end -here payment action

[Former Member]

hi

<b>in consignment fill up :</b> delivery goods moves to customer end - No payment action

<b>in consignment issue :</b> stock reduces the customer end -here payment action

[Former Member]

Thanks,

I have been aware of that fact, but my question was, in the case of stock reduction, what is the purpose of Delivery ? Please let me know

[Former Member]

Hi Raj,

Consignment Process is keeping your stock at a place where you can sell your goods from that place through the customer.

Consignment Fillup is nothing but filling up the goods i.e., keeping the goods at the place of the customer for sale. For this reason, you will be having an order, delivery, PGI but not billing. Since you are not selling the goods to the customer, billing is not involved.

Consignment Isssue is the process in which the customer pays for the goods he had sold . Thats why there is billing in this process.

Hope this adds information.

Also go through the link <u>http://sap-img.com/sap-sd/consignment-sales-process-in-sap.htm</u>

Mohan

Award points if it helps.

[Former Member]

Well, my question is that in the case of a consignment issue, since that there are goods already available to the customer at his place, why do we create a delivery again ? and what is the diff. b/w the delivery here and the earlier delivery create during fillup? Please let me know.

Thanks

[Former Member]

In consignment fill up, we will send the goods to the customers directly from our plant to the customers place.

In consignment issue, delivery is to do for the items he had sold and also billing for the items he had sold.

Hope this adds information.

Mohan

Award points if it helps.

[Former Member]

hi

in consigment issue delivery note is real to should reach to customer end. if information available in

<b>http://www.sap-img.com/sap-sd/consignment-sales-process-in-sap.htm</b>