Vendor Consignment - Creating a Consignment contract

[Former Member]

Hello,

I have a document from SCM Expert online on vendor consignment and I had a question regarding creating a consignment contract.

Do I need to create a vendor consignment contract via ME31K? If so, why? I just know that the document is stating to create, but I want to understand why, what purpose or value does the contact have?

Could I just create a consignment Purchase Order via ME21N, then do a MIGO 101K to recieve inventory into our warehouse?

Any input would be helpful.

Thank you all.

[Former Member · Accepted solution]

Hey Guys,

Thank you so much for your guys inputs. But I have another question. When I create a Purchase Requisition (PR).

When enter the material number and other inputs in the line item :

Do I need to enter K-consignment in the Item Category?

Do I need to enter Agreement number?

Do I just enter the material information and it will know what information to take and use?

Sorry guys for asking simple questions, but no one has done this before in our company and this is out of my area. Learning it has I go on the fly. :). Any inputs will be helpful.

Once again thank you all for your help

Regards,

Nav

[JL23 · Accepted solution]

you have to enter K-consignment in the Item Category in the requisition along with material number and the usual other fields

if you maintain a source list with the contract as item and make it a fixed source and makr it as MRP relevant then SAP can assign the source (contract number) itself when source determination is carried out. you do not have to enter the contract manually in the PR.

[Former Member]

Thank you guys for helping me and answering my questions.

[Former Member]

Thank you guys for the replies. But I have one more question regarding the consignment contract. So what happens the contract when the contract ends?

For example: If I create a contract starting 12/23/09 - 1/23/09. Does the contract close out? Do I manually close the contract? So what happens when the contract ends basically that's my question.

Regards,

Nav

P.S Sorry guys if I am asking simple questions, I am new at this process and learning as I go.

Edited by: Nav Sen on Dec 22, 2009 5:15 PM

[JL23]

you may get warning messages, but the the contract is not closed by itself. you have to change/close it yourself and after negotiation of next contract you maintain a new one.

A contract that is not valid at the order data will not be taken into consideration when you do a source determination in the requisitions.

try it yourself. create an contract with valid from date and valid to date in the past. then try to do a call off.

[Former Member]

Hi Nev:

Do I need to create a vendor consignment contract via ME31K? If so, why? I just know that the document is stating to create, but I want to understand why, what purpose or value does the contact have?

No need, you could create purchase info record for consignment vendor and material,The purchase info record will be effect when you post good receipt againt purchase document(such as PO or SA).

Could I just create a consignment Purchase Order via ME21N, then do a MIGO 101K to recieve inventory into our warehouse?

You could create consignment PO .But when you post good receipt,the material stock is belong to vendor and you have to tranfer consignment material to own(MVT 411K).You accouting people will use Tcode MRKO to do LIV.

Dick hua

Edited by: dick hua on Dec 22, 2009 3:46 AM

[JL23]

To be able to receive consignment stock into your warhouse you just only to have a consignment info record that has the prices that are used to create the liabilities when you remove inventory.

The PO is a formal single business case. A contract a long term agreement to get a certain prices over a longer period, or just to reserve a certain quantity for your needs.

It is not neccessary to have a contract for consigment scenario. But consignment business cases are usually long term business agreements and not just a one-time event, so from a business point of view a contract makes sense, while technically it is not needed.