Stock on Customer

[Former Member]

Hi Gurus,

I would like to know whether is there any concept in SAP SD that will allow Stock on Customer as same as the concept of Subcontracting in SAP MM. My scenario is not the consignment stock but as a warehouse facility provided by Distributor(Customer) followed by sales to direct customer from the Distributor facility.

I searched the forum and found to resolve the issue through STO. But for STO I have to create Plant for the distributor and if in the future we'll take services of multiple distributor then I have to create Plant for all of them.

Need expert opinion.

Regards

Imran

[Former Member · Accepted solution]

Thanks everyone for their suggestions.

I have resolved the issue and following is the link.

[Former Member]

Hi Imran,

yes you do need to open the distributors as vendors too as you need to post the invoice you will get from them for the commission fees.

About the calculation of these fees: the consignment fill up is not relevant for billing therefore you can't do a lot there.

One thing you can do it's to calculate the 3% commission in the invoice you create the consigment issue for the customer as this order is relevant for billing.

You could create a statistical condition to calculate the fee and a custom report to summarize commission fee due for each distributor.

Regards,
Enrico.

[Former Member]

HI Enrico

I cannot do it at the time of Consignment Issue as the end-customer is different and distributor will take the commission % all at once at the time of Consignment Fill-up. Example, if we move the stock of 1000$ so he'll take 3% on 1000$ but for example the end-user will buy 400$ stock then the commission will be wrong for the time being.

I did the billing at the time of Consignment Fill-up by making the Net price condition as statistical and commission condition as non-statistical and fortunately it hits the accounting as well. The accounting is:

Distributor                          Credit

Commission Expense                   Debit.

Now here I want to hit Distributor as Vendor for liability. Do you have any idea how can I do that.

Regards

Imran

[Former Member]

Hi Imran,

not sure how to handle this with standard procedures.

I would go for a custom transaction to calculate the incoiming fees and maybe posting the amount as a vendor invoice.

Regards,
Enrico.

[Former Member]

Hi Imran,

You can Process it through Standard Consignment Processing through small modifications on the billing side if you want to give the direct billing.

Regards,

Aman

[Former Member]

Hi Amandeep

Thanks for the quick response. But through consignment processing, how can I further do sales to direct customers. The direct customers will be dealing directly from us and that distributor(warehouse) will only be responsible for logistics handling. The billing will be directly dealing with us and the direct customer.

Regards

Imran

[jobis]

Hi Imran,

STO will be possible if its a different plant (warehouse). If thats not feasible, then an option will be to consider the distributor's place as a new Storage location.

Have the stocks moved into the new storage location, and for delivery use the SL for picking.

If the distributor is a partner or is captured in the sales order through some other field, then you can use it as a validation in an User exit for determining the SL during delivery.

Hope it helps

Regards

Jobi

[Lakshmipathi]

that distributor(warehouse) will only be responsible for logistics handling. The billing will be directly dealing with us and the direct customer

Why don't you explore the options of having a separate Shipping Point or Storage Location ?

G. Lakshmipathi

[Former Member]

Hi Imran,

the solution from Amandeep , customer consignment stock W, is correct from my point of view.

If you need to sale this stock to a customer you can just use the SB partner role (special stock partner).

You will transfer the stock to the distributor stock with order type KB (with sold to / ship to the distributor), free of charge. This will load the special stock W.

Then when you sell to direct customer you will enter an order type KE with the final customer as sold to and the distributor as SB role.  This will decrease the special stock W of your distributor.

Regards,

Enrico.

[Former Member]

Hi

I am not considering the Storage Location option because of the following reasons:

• The Storage Location stock/batches will be picked up in Sales Order of other customers. As batches is picked on FEFO based.
• The MRP will consider that stock and will not generate the Production Request - as this stock is subject to sales to specific customers.

Regards

Imran

[Former Member]

Hi Enrico

This is not the consignment process. We need to create the liability of the distributor at the time of stock movement.

Regards

Imran

[Former Member]

Hi Imran,

not sure to understand what you mean.

My understanding is:

You send finished products to the distributor.

Then you enter a sales order for your customer and deliver from the distributor stock.

Did I get it right?

If so you can use the consignment stock process even if it's not properly a consignment.

I used this process in my former company for the same reason.
Regards,

Enrico.

[Former Member]

Hi Enrico

Sorry for the late response as I have moved.

Actually we are taking Warehousing services from our distributor. When he orders he only charged for warehousing charges and keep the stock. He charged us some percentage on the total value of the Goods. When Customer orders to us, we book the Sales Order for the Customer and instruct our Distributor to ship to the Customer.

Hope it clears.

Regards

[Former Member]

Yes ok, in my opinion you can use the consignment process.

[moazzam_ali]

Hi

I think creating a separate storage location is best possible option here. You can create STO for transferring material. STOs can be created for same plant or you can move stock with store to store movement type.

I think your two concerns you shared in above post could be handled by PP guy. Did you discuss with PP guy?

Thakn$

[Former Member]

Hi

Yes, we have already excluded the Rejection Storage Location from MRP and cannot be use multiple storage location there.

Also from SD as well, the batch availability will run on all the storage location based on FEFO.

Regards

Imran

[moazzam_ali]

Thanks for updating and it seems the best possible solution.
So it means your issue is resolved. Isn't it? If you don't need to discuss anything further please close the thread.

Thank$

[Former Member]

I haven't got the answer which I asked when starting this thread.

"But for STO I have to create Plant for the distributor and if in the future we'll take services of multiple distributor then I have to create Plant for all of them."

Regards

Imran

[moazzam_ali]

Hi

You don't need to create plant. You need to create storage location for all distributors. Like I said earlier we can create STO within same plant from one store to other store. Have you checked this?

Thank$

[Former Member]

Hi,

Not yet checked the STO with Store location. Need to search some config and will update you.

Regards

Imran

[moazzam_ali]

Sure and I'll be waiting.

[Former Member]

Hi

Sorry for the late response as I am testing and checking all the scenario. Unfortunately I got stuck with one case where we cannot compromise. As I am doing the configuration of STO, the first step "Define Shipping Points" requires the Customer and Sales Area.

Now here I have two problems;

1) Currently its only a One Customer but our company is thinking to take services for another one. Now the supplying plant will be one and receiving customers will be more than one. What I could do in that case?

2) That's a major problem w.r.t Sales Area. Our divisions are multiple and therefore our Sales Area (Sales Org/Distribution Channel/Division) have different combinations. For the same warehouse we will transfer different sales area materials. How can I mention that?

What do you say?

Regards

Imran

[Former Member]

Hi Enrico

As per your suggestion I tried it with Consignment Process as well and it works perfectly with all the steps except one.

As I mentioned above that the stock will be placed at the Distributor end, the distributor is charging 3% of the sale value as a commission; which in that case we have to pay to Distributor. As I run the process the Consignment Fill-up process doesn't contain any billing document, how can I generate the Commission Expense bill. Also I am confused about whether I need to open the Distributor as a vendor also for booking the liability.

Regards

Imran

[Former Member]

Hi Imran

Why not charge the 3% on the billing that is generated from the Goods Issue side of the consignment process. If it is a percentage of sales value, then this is the only time when true sales value is known, and it is the point at which ownership changes.

Normally commission agents are created as vendors, in order to pay them, or to offset against a customer.

Cheers

[moazzam_ali]

Hi Imran

As per my suggestion you don't need to create multiple customers. For assigning customer in STO configuration is something different from normal customers.

We create one customer for each plant and assign that in configuration. This customer is not your actual customer who is going to keep your material and do business transactions with company.

For sales area we create one sales area for STO. Lets say XXXX sales organization XX distribution channel and XX division is only for all STO. If you wanna use any existing sales area on which all materials are extended you can use that as well. This has nothing to do with material's division. This sales area is only used for creating outbound delivery.

You can also create STO without using delivery document if you don't have any shipment document process. You can simply create STO and post materials in transit with MIGO with 351 movement type and receive in receiving store with 101 against material document.

Thank$

[Former Member]

Hi Richard

Yes you are correct that Consignment Fill-up is the only time when we know the Sales Value and therefore I wanted to hit the commission at that time.

Could you please elaborate how can I create Commission agent as vendor and hit him at the time of Sales Order?

Regards

Imran

[Former Member]

Hi Moazzam

I got your idea what you are saying regarding Customer and Sales Area. For Customers, yes we can do that but for Sales Area it is very difficult as opening a new Sales Area combination will lead to inappropriate reporting. Also if we open new sales area for STO, e.g. 1500/10/10 and this material is already created for 1500/20/10 which is their actual sales area, how can we do the sales afterwards from their actual sales area from distributor.

I have to follow outbound delivery as we need to do shipment document process.

Regards

Imran

[moazzam_ali]

Hi

You can use you existing sales area in configuration assignment. Use the existing one on which every material or most of the materials are extended. Maintain customer master data for that sales area assign in settings.

Thank$