Consignment

[nisha_sharma1]

Hello everybody,

Can anybody explain me the concept behind consignment(vendor and customer consmt.) with process flow/step by step.

What is vendor consigment? what is customer consignment?

give some real time examples.

With Regards,

Nisha

[Former Member · Accepted solution]

Customer Consignment::

Consignment stock is merchandise which is stored at the customer location but which is owned by your company. The customer is not obliged to pay for the merchandise until they remove it from consignment stock. The customer can usually return consignment stock which is unused.

Since consignment stock still forms part of your valuated stock, you must manage this stock in your system. However, consignment stock must be:

Managed separately from the rest of your stock so that you are aware of the stock which is stored at the customer location

Managed separately for each customer

From SAP Retail’s point of view, the issuing of consignment stock is treated as a special kind of sales order, using special sales order types.

Vendor Consignment::

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. (For information on consignment info records, refer to Pricing for Consignment Stocks.)

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 When the material is withdrawn it is valuated at the price of the respective vendor.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. Withdrawals can only be posted from unrestricted stock, however.

Pls award points if useful.

Reg

Sachin

[Former Member]

HI Nisha,

I had some good example for consignment scenario as such based on my domain exp.

I was working with company X and we supply all the products to the customers thr Dealers. Customer places orders on Dealer and Dealer inturn places order on company and company supplies materials directly to the End customer and to Dealer stores based on case to case.

Now one customer wanted us to maintain the stocks required by him (based on previous consumption pattern) in the Factory Stores only, as this will help him in emergency like Breakdon of machinary etc. so that the impact on poduction can be reduced to some extent.

So What We did was to enter into a contract with the customer saying that cutsomer would ensure minimum Sales every month and ensure X (Our company) a good annual sales turnover.

Now our local dealer opened a small stores in Customer Factory (called as Dealer Factory Stores). This can be mapped with Scenario of Consignment fill up (In SAP).

When ever cutsomer wants they will withdraw material from Dealer Factory Stores - This can be mapped with Scenario of Consignment Issue (In SAP).

Based on Consumption etc some materials are brought back from Dealer Factory Stores to Dealer Main Stores - This can be mapped with Scenario of Consignment Pick up (In SAP).

The returned material needs to entered back to Dealer Main Stores - This can be mapped with Scenario of Consignment Returns (In SAP).

In industrial circles consignment scenario is also termed as Consumer Operated Stores. What example I gave is a real time example in Industry.

Hope this provides some understanding.

Reward if it helps

Regards

Srini

Some S

[Former Member]

Hi.,

Vendor consignment-

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.

<u><b>Customer consighnment-</b></u>

1. Consignment fill up:

Sales document type is KB

Item category KBN

schedule line category 1

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

---

delivery item category. It will not be relevant 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

schedule line category: C0 or C1

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

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

In schedule line category, your setting is 633 movement type, relevant 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

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

Your setting item category relevant 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 return delivery to sales document type.

Sales document: KA

Item category: KAN

REWARD if helpfull

Thanks & Regards

Narayana