Consignment (SAP Library - Materials Management)

Consignment

Purpose

In procurement on a consignment basis, your vendor delivers certain materials to you that you handle in the consignment stock of your business. The consignment stock remains the property of the vendor until you remove material from the consignment stores. Once you have withdrawn materials, you will have liabilities towards the vendor that you need to pay in periodic settlements (for example, monthly). You and your vendor can agree on a time period after which you have to transfer unused consignment material to your own stock.

AFS supports the standard processes of procurement on a consignment basis at SKU level.

Please refer to the SAP standard documentation on Procurement on a Consignment Basis.

Prerequisites

In order to procure and place materials in storage as consignment materials, you have to have created the corresponding master data for pricing. You can specify prices for consignment materials at SKU level so that liabilities can also be settled at that level.

Process Flow

Procuring Consignment Material

You procure consignment materials just like standard materials using purchase requisitions and purchase orders.

Assign the item category K to consignment items so that the goods receipt will be posted to the consignment stores and the system does not permit any invoice receipts for this item.

Do not enter a net price for consignment items.

Posting a Goods Receipt of a Consignment Material

You can post a goods receipt of a consignment material to unrestricted-use stock, quality check stock, or blocked stock.

You post the goods receipt with reference to a consignment order just as you would a goods receipt for a normal stock material.

You post a material delivery without a purchase order in inventory management via Logistics ® Materials Management ® Inventory Management ® Goods Movement ® Goods Receipt ® Other. In the menu, choose Movement type ® Receipt ® W/o purchase order ® To consignment...

The consignment stock in the MRP increases with the goods receipt. However, since the consignment stock is owned by the vendor up until the goods withdrawal, the valuated stock of the material remains unchanged.

Note

There are two ways to display the consignment stock at SKU level:

In the stock overview (Logistics ® Materials Management ® Inventory Management ® Environment ® Stock ® MMBE - Stock Overview ), set the indicator Also select special stocks and execute the evaluation. Consignment stock is identified by the line Vendor consignment. Double-click on this line to get detailed information on the stock types of the consignment stock.
To see a display of consignment stock for several materials as well as price information, choose Logistics ® Materials Management ® Inventory Management ® Environment ® Consignment ® Consignment from Vendor ® Stock.

Posting a Goods Issue from the Consignment Stock

You post a goods issue to consumption from the unrestricted-use stock as you would a goods issue for a normal stock material via Logistics ® Materials Management ® Inventory Management ® Goods Movement ® MB1A - Goods Issue. Choose in the menu Movement type ® Consumption ® To cost center / project ® From consgt. stores. The withdrawal causes a liability towards the vendor.

Transfer Posting a Consignment Material

For consignment stock, carry out the transfer posting as you would for normal stock materials by choosing Logistics ® Materials Management ® Inventory Management ® Goods Movement ® MB1B - Transfer Posting. For the movement type, choose Movement type ® Transfer posting ® Vendor consignment ® .... By choosing the entry Vendor consignment, the system will set the special stock indicator K next to the corresponding movement type.

To transfer consignment material to your company’s own stock, choose Vendor consignment ® Consignment to own.

Settling Consignment Materials

Liabilities towards the vendor arise as a result of the withdrawal of materials from consignment stock to consumption or transfer posting consignment stock to your own stock. You enter these liabilities as invoices and credit memos in invoice verification. The settlement of consignment materials takes place without invoice receipt and can be carried out periodically in the background.

To do this choose Logistics ® Materials Management ® Logistics Invoice Verification ® Automatic Settlement ® MRKO - Consignment and Pipeline Settlement.
To see withdrawals and the resulting liabilities at SKU level, choose Display in the group box Processing. Check the listed data and then go back and settle the liabilities by choosing the option Settle and executing the settlement.
Since the consignment settlement is connected to the message determination, a message record will be created with each settlement, with which you can inform your vendor of the posted withdrawals and return deliveries.

AFS Restrictions

The scheduling agreement with item category K is not supported by AFS at SKU level.