sale without sending out goods after goods issue

[Former Member]

Dear All

consider a company who sells an item to a customer and the goods issue process is taken place consequently. but customer asks the company to keep the goods for a while on company permises, in other words the good is in the possession of customer but still remains in company permises. (for instance an equipment is sold but it is huge and the time of instalation is in few days so customer wants the good to be transported to his permises on a day it must be installed due to lack of capacity) is the any standard process to solve this issue or any suggestion to do so?

thanks in advance to help me on this issue

[Lakshmipathi · Accepted solution]

This can be handled very well out of SAP and it is mutual understanding between the seller and buyer.  May be you can explore POD functionality

G. Lakshmipathi

[Former Member · Accepted solution]

Dear G.Lakshmipathi

thanks for your reply

as i am searching for a systematic control could you please explain more or do you have any best practice document related to this issue?

many thanks

[Lakshmipathi · Accepted solution]

If you want to capture all activities into SAP, then one option is I already suggested.  If you search with that text, you will get lot of inputs from where, you can proceed and achieve the desired result.

The other option could be handled in such a way that as and when goods are being despatched, definitely, there would be some security procedures where these would be recorded either manually in Material-Out Register or in some system.  If it is already captured in SAP well and good; else, you need to develop an out-register also in SAP with some zee transaction.

Once this is in place, whenever huge materials are planned for despatch, once PGI is done within one week, the same material code should reflect in "out-Register" also.  If not, mail should be triggered to the concerned team.  Of course, you can modify the logic to suit Business requirement.  But I don't think, such huge machineries are despatched regularly but only occasionally in which case, it is not worth going for an enhancement and capturing in SAP.

G. Lakshmipathi

[patrick_g1]

Hi Rakesh,

   If you want to change to ownership of the material you need to do GI.

All other processes like customer consignment, stocks in transit, etc. will keep the goods in ownership of your company and this is not requested.

Sorry but I do not see another option here. Maybe another idea is available here.

Would be interesting to hear 🙂

Best regards

Patrick

[Jelena]

PGI is mostly about transfer of the ownership, as others have also pointed out. After you do PGI goods belong to the customer. Regardless of where they are located.

But still I don't see any response to the questions I raised - we are asked is there a chance to "handle this in SAP", but what exactly do you want SAP to do? We can't figure out the business requirements for you. Figure out what is it that you want (e.g. what transactions, what information or FI postings, etc.). Until then this is a pointless conversation IMHO.

[Former Member]

Dear Jelena

i taught based on ravi sankar explanation it is clear to all. but for more clarification yes i need to know is there any transaction to help me keep the PGI item keep at my location and after a requested day by customer send it to him and if there is any infrmation or fi doc needed?

[patrick_g1]

Hi Rakesh,

  even if the goods are sold to a cheaper price and the customer cannot / do not want to keep the stock the goods are sold.

From my point of view you need to apply this within your balance sheet.

This is why you need to "reduce" your stock as of the fact that you have sold the goods.

I think the goods in transit is one option.

Using POD might be also an addition to the stock in transit.

Problem here might be the situation that you create the delivery note and all shipping papers before they are relly used.

How about this?

Best regards

Patrick

[Former Member]

Dear All

the case is exactly what Ravi Sankar explained comprehensively.

@Ravi Sankar:

In case there is enough room to keep PGI  Items for customer at company's place, is there any chance to handle it in SAP?

thanks

[former_member184555]

This is a valid requirement in real time business in some parts of the globe. One of the example is sales of bulk and seasonal products like cement, fertilizers, steel etc., Sometimes, though there is no real demand in the market, the customer purchases the product for various reasons like expecting increase in price, expecting short supplies during demand period, forced selling by the marketing team and many more. The customers may not have enough space to hold the stocks in their location. So, they look for some space to store the material till they get space to carry it. When the sales are handled from warehouses in the field, specified rent will be charged from the customer for storing these materials. Sometimes, the rent will be borne by the company by way of providing special discounts or by issuing credit notes. But, storing the materials in the plant itself (doing PGI without any physical movement) may not be possible practically if it is a manufacturing plant. The plant itself struggles for storage space and keep trying to send out the stocks to warehouses in different locations.

[former_member183501]

This is purely the  understanding between (Logistic,Concerned Sales Team & Customer).However, in Logistic department, though,if your organization is having "Customer Service Team" who take care of "Transit-Sheet" & can mention the reason for not delivering and based on that "Report" Logistic head may ask to sales team whether they want charges for keeping the GI Stock or not and as suggested by  Sir, it should depend on the business relationship between Vendor and Customer.

Kind Regards

Kamlesh

[former_member182378]

Rakesh,

As Jelena asked, what is the business requirement? warehouse charges, monitoring and controlling, reporting?

When does client know that there should be a "postponement" in the goods receiving date? at a time close to goods being dispatched from warehouse (just before PGI)?

What is the benefit for the client if PGI is done and then goods are kept at the vendor warehouse? Maybe delay the PGI date;

option1 if possible, inform your vendor that the warehousing activities - picking etc. should be postpone, in these cases.

added option2. pick those goods and place in a special cross doc area. this material will now sit in this storage location (special cross dock) and it will give visibility to users. Once customer confirms the date on which goods should leave the warehouse, pick from this cross dock and do PGI.

comment - In warehousing, we did this (movement within warehouse, from one storage location to another)

TW

Message was edited by: TW Typewriter - added in blue

[former_member182378]

Rakesh,

From your post, the main reason to keep the material in company warehouse is lack of storage space with customer. Please confirm this.

If yes, then doing PGI or not, is not a critical part, with reserving available goods and creating delivery should be enough to guarantee the goods to customer. And then when goods required PGI can be done. Please reply to my previous post.

PGI means goods have left the warehouse, in your case, goods will remain in the warehouse, so is PGI correct? Is PGI mandatory?

TW

[former_member184555]

Hi TW,

In these kind of scenarios PGI is required only for change of ownership...from company to the customer.

[former_member182378]

Ravi, thanks for sharing your real time experience! it adds value!

TW

[jagdeepsingh83]

You can also explore stock in transit process for valuated stocks, This means even you have PGIed but items are still in transit.

Valuated Stock in Transit - ERP SCM - SCN Wiki

[Jelena]

The real question is - why is this an "issue" and what exactly is the concern? As you've pointed out, as soon as you do PGI the ownership gets transferred to the customer.

Do you need to charge the customer for storage services? Do you need to have some additional tracking information? If not then there is nothing to be done in SAP, it just needs to be managed by the warehouse personnel.