Chemicals: Procurement & Consumption of Consigned Inventory

In consignment processing, the vendor provides material and stores it on the customer's premises. The vendor remains the legal owner of the material until material is withdrawn from the consignment stores. Only then does the vendor require payment. The invoice is due at predefined intervals, for example, monthly. In addition, customers can also arrange with the vendor that they take over ownership of the remaining consignment material after a certain period of time.

The daily MRP run creates purchase requisitions for parts that are to be procured on a consignment basis.

This scenario consists of the following steps:

• Goods receipt to vendor consignment stock
• Transfer posting of vendor consigned stock to own stock
• Invoice verification
• Outgoing payment
• G/L: Period-end plant

• Automatic posting of goods into vendor consignment stock
• Fewer manual FI postings required: Upon goods issue from consignment storage, the relevant invoice data is transferred to FI. Periodic invoicing generates and releases the vendor invoices