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Consignment Scenario

Hi all,

Can any one explain consigment scenario. Step by step by procedure would be help.

Thanks.. Damodar

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    author's profile photo Former Member
    Former Member
    Posted on Sep 21, 2008 at 09:26 AM

    Dear,

    Customer Consignment is a form of business in which the vendor maintains a stock of materials at a customeru2019s location. The vendor retains ownership of the materials until they are withdrawn from the consignment stores. The customer is only charged for product once it is reported as used at which time it is deleted from inventory.

    There are four standard SAP document types:

    (KB) Consignment Fill-up: Sends stock from storage to Customer Consignment.

    (KA) Consignment Pick-up: Returns stock from Consignment to Storage.

    (KE) Consignment Issue: Charges the customer and Removes from Consignment.

    (KR) Consignment Returns: Credits the customer and returns to Consignment

    The process steps for each one above are availabel at :

    http://esoadocu.sap.com/socoview(bD1lbiZjPTgwMCZkPW1pbg==)/render.asp?packageid=DBBB6D8AA3B382F191E0000F20F64781&id=0D90A5B573ED43F3B686EDAC747AB691

    With a Consignment Fill-Up document (type KB), stock is physically sent to the customer (VA01 to vl02n) but no billing is done because the stock is still owned by the Vendor.

    Once used, a Consignment Issue (KE) document type is processed with VA01 (and a "virtual" Delivery is processed) which removes the stock from Consignment stock and Bills the customer (VF01).

    If a customer is billed for stock which was not really used, a Consignment Return (KR) is created with reference to the Issue (KE) which puts the materials back into Consignment stock and gives the customer credit.

    If products that are in Consignment stock are found to be damaged or no longer needed then a Consignment Pick-up (KA) is created to move the stock from Consignment back to stock (no credit is issued because the customer was never billed).

    Whatu2019s the difference between a Consignment and a standard Sales Order?

    Sales Orders (and Returns) move product out of (and into) Inventory.

    Consignment Fill-up and Pick-up move products but they remain in Inventory.

    Regards,

    Syed Hussain.

    Edited by: Syed Hussain on Sep 21, 2008 12:28 PM

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    • Hi,

      For Consignment Process, you need to maintain the Consignment Info Record in ME11. Here maintain the Prices and Tax Code mandatory (Before this activate Consignment Info Record in OMEV )

      Also in SPRO > Enterprise Structure > Assignment > Materials Management > Assign standard purchasing organization to plant

      Then create Consignment PO in ME21N with Item Category as "K", here No Price will be maintained

      Do Goods receipt w.r.t. PO in MIGO to Vendor consignment stock (At this time No FI Entry will get generated)

      Do Transfer posting of vendor consigned stock to own stock using 411 K in MB1B. At this time system will pick up the Price from Consignment Info Record and post the Accounting Document. Here following FI Entry will appear;

      (BSX) Stock A/c - Dr
      (KON) Consignment Liabilities - Cr

      Now do Consignment Settlement in MRKO. Here you can not change the Invoice Value. Here following FI Entry will appear;

      Vendor A/c - Cr
      Consignment Liabilities - Dr

      Prerequisite for MRKO: -

      - Maintain condition record for output type KONS in MRM1

      Then take printout of the Settlement Document in MR91.

  • author's profile photo Former Member
    Former Member
    Posted on Sep 22, 2008 at 09:06 AM

    Consignment

    Use

    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.

    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.

    Pricing for Consignment Stocks

    Pricing for Consignment Stocks

    Use

    Before you can order a material from a vendor or post a goods receipt to consignment stock, you

    must maintain the consignment price for the vendor in an info record. The price is required for

    material valuation and accounting purposes.

    If you order consignment material from several vendors, the system maintains the consignment

    stock separately for each vendor, since the individual quantities of the material can have different

    prices with each vendor.

    4711

    Quantity:

    Price: 1.30

    800 pc

    $

    Miller

    Quantity:

    Price: 1.50

    700 pc

    $

    Consignment

    material from

    vendor Smythe

    Quantity:

    Price: 1.60

    900 pc

    $

    Pytcher

    Material Material

    Material

    Material

    Consignment

    material from

    vendor

    Consignment

    material from

    vendor

    Activities

    Creating Info Records for Consignment Stocks

    To enable you to create an info record for a material, the material master record must already

    exist for the plant concerned. To create an info record, choose Master data Info record

    Create. Maintain the data as required and save the info record.

    Creating Purchase Requisitions for Consignment Material

    You enter purchase requisitions for consignment materials in exactly the same way as for other

    materials.

    You accept the order category (such as NB) that the system proposes as a default and enter the

    item category K (for consignment).

    Creating Purchase Orders / Outline Agreements for Consignment Materials

    The procedure for creating consignment orders is the same as for standard purchase orders or

    outline agreements. However, you must note the following:

    Enter the item category K for the consignment item. To ensure that the goods receipt is

    posted to the consignment stores and an invoice receipt cannot be generated for the

    item.

    Do not enter a net price.

    Stock Movements for Consignment Material

    Use

    This section describes the different movement types for consignment material.

    Posting Goods Receipts for Consignment Material

    Goods receipts to your consignment stores can either:

    refer to a purchase order or

    be made by the vendor directly without a purchase order

    The posting procedure differs slightly.

    A goods receipt to consignment stock is possible for three stock types:

    Unrestricted-use stock

    Quality inspection stock

    Blocked stock

    Goods Receipt With Purchase Order

    If a purchase order exists for the consignment material delivered, enter a goods receipt as

    follows:

    1. From the Inventory Management menu, choose Goods movement Goods receipt

    For purchase order PO number known. The initial screen is displayed.

    2. Enter the number of the purchase order to which the goods receipt refers. You can also enter

    the plant and storage location.

    3. Select the movement type with Movement type PO to warehouse.

    Press ENTER to display the item overview.

    4. Select the items you wish to process and check the quantities delivered. If required, enter a

    stock type in column S. Copy (adopt) the selected items.

    5. Post the goods receipt.

    Goods Receipt Without Purchase Order

    If the vendor's goods receipt is not based on a purchase order, proceed as follows:

    1. Choose Goods movement Goods receipt Other from the Inventory Management

    menu.

    2. On the initial screen choose Movement type Receipt W/o purchase order To

    consignment unr. Enter the plant and storage location. Press ENTER to display the collective

    entry screen.

    3. Enter the number of the vendor.

    4. Enter the number and quantity of the consignment material.

    5. Post the goods receipt.

    Updating Consignment Stock

    After a goods receipt for consignment material has been posted, the consignment stock of the

    material increases. The consignment stock is available for MRP.

    However, the material's valuated stock does not increase since the consignment stock still

    belongs to the vendor.

    Displaying Consignment Stock

    Use

    You can display data for consignment stock using the following functions:

    Display consignment info record

    Display the stock overview

    Display consignment stocks

    Activities

    Display consignment info record

    From the Purchasing menu, choose Master data Info record Create. Maintain the data

    on the initial screen and choose Continue.

    Display the stock overview

    In the stock overview you can display the consignment stock of a material for all vendors. In

    addition, all the other stock types (for example, own stock) are displayed.

    From the Inventory Management menu, choose Environment Stock Stock overview.

    Maintain the data on the initial screen and carry out the evaluation.

    An overview is displayed of your own stock and the consignment stock according to your

    selection criteria.

    If consignment stock exists, the line Vendor consignment is displayed for the relevant storage

    location. Select this line to display detailed information on the consignment stock.

    Display consignment stocks

    This function allows you to display the consignment stocks of more than one material at the same

    time. From the Inventory Management menu, choose Environment Consignment Vendor

    consignment Stock. Maintain the data on the initial screen and carry out the evaluation.

    Goods Issue from Consignment Stock

    Use

    You can only post a goods issue from consignment stock to consumption if the material belongs

    to unrestricted-use stock. If the consignment material is in quality inspection or blocked stock,

    you must first transfer it to the unrestricted-use stock.

    Activities

    Choose Goods movement Goods issue. Enter the data as required, including movement type,

    account assignment object, and vendor.

    After the goods issue, the vendor is due the net value of the goods issue.

    Transferring Consignment Stocks

    If, for example, you want to transfer consignment material within a plant from one storage

    location to another, proceed as follows:

    1. From the Inventory Management menu, select Goods movement Transfer posting. The

    initial screen is displayed.

    2. Enter the plant and the issuing storage location. Choose Movement type Transfer

    posting Consignment SLoc unre. to unre. (Storage location unrestricted to

    unrestricted). It is also possible to transfer quality inspection stock or blocked stock.

    3. Press ENTER. The collective entry screen appears.

    4. Enter the following data:

    u2013 Receiving storage location

    u2013 Vendor

    u2013 Material

    u2013 Quantity

    5. Post the stock transfer.

    The transferred quantity is now managed in the consignment stock of the receiving plant.

    Managing Special Stocks (MM-IM) SAP AG

    Transferring Consignment Material to Another Stock Type

    22 April 2001

    Transferring Consignment Material to Another Stock

    Type

    If you posted the consignment material to the quality inspection stock or blocked stock, you must

    transfer it to the unrestricted-use stock before it can be withdrawn.

    To transfer a consignment material from one stock to another, proceed as follows:

    1. From the Inventory Management menu, select Goods movement Transfer posting. The

    initial screen appears.

    2. Enter the plant and storage location. Choose Movement type Transfer posting

    Consignment and then the stock type (for example, Ql to unrestricted).

    3. Press ENTER. The collective entry screen appears.

    4. Enter the following data:

    u2013 Vendor

    u2013 Material

    u2013 Quantity

    Only enter a receiving storage location if the material should be stored in another storage

    location.

    5. Post the document.

    The consignment material is now managed with a different stock type.

    Transferring Consignment Material Into Own Stock

    Prerequisites

    Supposing you agreed with the vendor that after six months you will take over ownership of the

    remaining consignment stock. To do this, carry out the following goods movement:

    Procedure

    1. Choose Goods movement Transfer posting. The initial screen appears.

    2. Enter the plant and storage location. Choose Movement type Transfer posting

    Consignment Consignment to own. (Movement type 411 with special stock indicator K)

    3. Select Continue. The collective entry screen appears.

    4. Enter the vendor, material, and quantity. Only enter a receiving storage location if the

    material should be stored in another storage location.

    5. Post the document.

    Result

    The transfer results in a liability towards the vendor.

    Settling Consignment Liabilities

    Use

    Removing material from consignment stores or transferring material to your companyu2019s own stock

    results in liabilities towards the vendor. You should settle these liabilities at regular intervals.

    Consignment materials are settled without the vendor issuing an invoice, as the vendor company

    is unable to track withdrawals directly. The vendor can only manage its consignment stock by

    taking deliveries and payments into account.

    You can initiate payment for consignment withdrawals using the Logistics Invoice Verification

    application component.

    Physical Inventory of Consignment Material

    This section explains to what extent the physical inventory of consignment material differs from a

    standard physical inventory. You start from the physical inventory menu.

    ake a physical inventory by:

    creating a physical inventory document

    entering the physical inventory count

    posting inventory differences

    Creating a Physical Inventory Document

    This section explains how to create a physical inventory document. The inventory document is

    used as a work sheet for the warehouse count and as a basis for further physical inventory

    transactions.

    1. From the Physical Inventory menu, choose Phys. inventory document Create. The initial

    screen appears.

    2. Fill out the initial screen. Enter k in the Special stock field.

    3. Press ENTER. The item overview is displayed.

    4. Enter the vendor and all the materials that are to be counted. If you want to include the

    quality inspection stock or blocked stock of a material, enter a new item for the material

    number and enter the relevant stock type in the field STy (Stock type).

    You can enter materials for another vendor by choosing Edit New items. On the

    screen for entering new items overwrite the entry in the field Vendor.

    5. Post the document.

    Entering the Physical Inventory Count

    This section explains how to enter the results of the warehouse inventory count into the R/3

    System.

    1. From the physical inventory menu, choose Inventory count Enter. On the initial screen

    enter the physical inventory document number.

    2. Press ENTER and enter the counted quantity for each item on the next screen.

    3. Post the document.

    Posting Inventory Differences

    After entering the count, you must post the differences between the stock in the R/3 System and

    the counted stock. To do this, proceed as follows:

    1. Choose Difference Post.

    2. Enter the document number and press ENTER. The difference quantity is displayed.

    3. Post the document.

    Thanks

    Anand

    Edited by: anand k on Sep 22, 2008 11:08 AM

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  • Posted on Sep 21, 2008 at 10:37 AM

    Hi ,

    1) Create a Purchase Information Record with Consignment category / type.

    Maintain the Net price and tax code in PIR.

    2) Create a Purchase Order with ME21N and save.

    3) Make a GR for the Material

    4) Bring the Consignment stock into Unrestricted Stock using MB1B trxn code use 411K.

    5) Maintain condition record for Output in MRM1 trxn code.

    6) Settle the Vendor Consignment in MRKO trxn code. Just give Vendor and select the Consignment option and in Processing tab select display opton and execute.

    7) Once you confirm that the MRKO trxn is showing correct information in diaplay mode, then change processing mode to Settle mode and execute.

    Revert back in case any doubts.

    Thanks & Regards,

    Kiran

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