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Consignment Process

The document discusses the consignment process, which involves a vendor providing materials and storing them on the company's premises. The vendor remains the owner until materials are withdrawn from consignment stock. Master data must be set up for consignment materials and purchase info records. A consignment order is created without price, and a goods receipt is posted to vendor consignment stock. Periodic settlements are done for withdrawals from consignment stock.

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Suganya Soundar
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© © All Rights Reserved
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301 views

Consignment Process

The document discusses the consignment process, which involves a vendor providing materials and storing them on the company's premises. The vendor remains the owner until materials are withdrawn from consignment stock. Master data must be set up for consignment materials and purchase info records. A consignment order is created without price, and a goods receipt is posted to vendor consignment stock. Periodic settlements are done for withdrawals from consignment stock.

Uploaded by

Suganya Soundar
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Consignment process

Consignment:

Consignment stock is a special stock maintained in the inventory. 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.
Payment settlement for these stocks is done on certain agreed periods with the vendor E.g.:
monthly, weekly, etc.

Consignment process is explained as:

A consignment material can be allocated to one of three stock types:

 Unrestricted-use stock
 Quality inspection stock
 Blocked stock

Master data specification for consignment stocks:

The following master data is maintained for consignment stocks. They are:

 Material master
 PIR(purchase info record)
Material master:

If the consignment material is automatically planned, you can specify in the material master that
consignment purchase requisitions should be created during the requirements planning run. To
do this, enter the special procurement type consignment (10) in the selection field special
procurement in MRP 2 view as:

In MM01:

Purchase info record:

To create a consignment info record, choose the info category Consignment in the initial screen. During a
source allocation for a consignment item, only consignment info records will be taken into account.

In ME11:
Note: It is not possible to create consignment orders without a consignment info record.

Before you can order consignment material at a vendor or post a goods receipt into consignment
stock, you have to maintain the price of the material for the particular vendor in a purchasing
info record.

Consignment Order:

 Item category K

 You must enter a material number

 You cannot enter a purchase order price or conditions for the item

 Goods receipt required and is posted to vendor consignment stock, and is non-valuated.

 You cannot enter an invoice for the consignment item

Consignment in Inventory Management:

 Special stock type vendor consignment


 GR with or without reference to a PO

 Transfer postings within the vendor consignment stock and from vendor consignment
stock to your own stock

 Goods issue from vendor consignment stock.

Step 1: Purchase Order:

Create a purchase order using ME21N transaction.

Choose Item category K for consignment. This item category has the following effects:

 You must enter a material number.


 You cannot enter a purchase order price or conditions for the item.
 You require a goods receipt for the item. The goods receipt is posted in the vendor
consignment stock, and is non-valuated.
 You cannot enter an invoice for the consignment item

Vendor Consignment in Inventory Management:

Inventory Management supports the following functions within vendor consignment:

 Special stock type vendor consignment.


 Goods receipt in vendor consignment stock with and without reference to a purchase
order
 Transfer postings within the vendor consignment stock and transfer postings from vendor
consignment stock to your own stock
 Goods issues from vendor consignment stock
Material that we procure using vendor consignment is managed in a vendor-related special stock,
K (consignment vendor). This special stock is updated at storage location level, as the material is
actually in your own company.

If we have consignment stock for a material, it is displayed in the stock overview (transaction
MMBE). At storage location level, there is a list of totals of all consignment stocks. With a
double-click on this special stock level, you can see an exact overview of how this consignment
stock is distributed to the individual consignment vendors.

Example:

Unlike the stock overview, with the Display consignment stocks function, you can display
consignment stocks for several materials at the same time.

From the Inventory Management menu, choose Environment→ Consignment→ Consignment


from Vendor→ Stock (transaction MB54).
Step 2: Good receipt:

Post goods receipt in MIGO transaction.

 You can see that movement type is 101, and the special stock indicator is K -
consignment stock (vendor).
 Check items as OK, and Post.
Step 3:

We are not creating an invoice using MIRO transaction for consignment goods. Instead,
liabilities are settled in MRKO transaction for the appropriate period.

1. Execute MRKO transaction.


2. Enter Company Code and Vendor.
3. Enter the date range (you can use document date, per your preferences).
4. Choose special procurement type you want to settle for. Consignment.
5. Choose if you want to display available document or settle. Choose Display to see whether
it is settled or not.
6. Show only withdrawals not settled or only settled withdrawals, or both. You can also
restrict the displayed/settled records by material.
7. Execute.
If the vendor is shown as not settled, go back to previous screen and press settle instead of
display.

After pressing settle button, press execute again, the document is displayed as:

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