Consignment Procedure

8/20/2019 Consignment Procedure

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APAC Procurement Business Model

Consignment Procedure Training Document

Local Group Companies

Submit Date, 17-Nov-04

Copyright @ 2003 Holcim Services (Asia) Ltd.


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Document Control

Document Name Consignment Procedure Training Document

Author Ha Tran

File Name & Path

Created 17-Nov-04Last Edited

Printed on

Version Revision Date Revision Description Author Sign-off

V1.0 17-Nov-04 Ha Tran

Document Approval

Role Name Signature Date

Distribution List

Role Name Signature Date

Consignment Procedure Training Document 2/35This document is for Super Users Training on 17 – 21 January, 04


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Table of Contents

CONSIGNMENT: USE......................................................................................................................... 4

FEATURES .......................................................................................................................................... 4

PRICING FOR CONSIGNMENT SOCKS............................................................................................ 4

USE.................................................................................................................................................... 4

PROCUREMENT OF CONSIGNMENT MATERIAL............................................................................ 5

USE.................................................................................................................................................... 5 ACTIVITIES .......................................................................................................................................... 5

Creating Purchase Requisitions for Consignment Material ....................................................... ....................5 Creating Purchase Orders / Outline Agreements for Consignment Materials ............................................... 5

STOCKS MOVEMENTS FOR CONSIGNMENT MATERIAL.............................................................. 5

USE.................................................................................................................................................... 5 POSTING GOODS RECEIPT FOR CONSIGNMENT M ATERIAL ..................................................................... 5

Goods Receipt With Purchase Order............................................................................................................6 Goods Receipt Without Purchase Order.......................................................................................................6

Updating Consignment Stock........................................................................................................................6

DISPLAY CONSIGNMENT STOCK ........................................................................................................... 6 Use................................................................................................................................................................6 Activities....................... ........................................................ .................................................................. .......7

TRANSFERRING CONSIGNMENT STOCKS............................................................................................... 7 TRANSFERRING CONSIGNMENT M ATERIAL TO ANOTHER STOCK TYPE.................................................... 7 TRANSFERRING CONSIGNMENT M ATERIAL INTO OWN STOCK ................................................................ 8

Prerequisites .................................................... ........................................................ ..................................... 8 Result............................................................................................................................................................8

SETTING CONSIGNMENT LIABILITIES ..................................................................................................... 8 Use................................................................................................................................................................8

BUSINESS PROCESS PROCEDURE................................................................................................. 9

1. CREATION OF PURCHASING INFO RECORD FOR CONSIGNMENT.......................................................... 9 2. M AINTENANCE OF GOODS RECEIPT FOR CONSIGNMENT STOCK ....................................................... 18 3. M AINTENANCE OF GOODS ISSUE FOR DIRECT CONSUMPTION ........................................................... 24 4. PERFORM CONSIGNMENT LIABILITIES SETTLEMENT......................................................................... 31



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Consignment: Use

In consignment processing, the vendor provides materials and stores them on the enterprise’spremises. The vendor remains the legal owner of the material until materials are withdrawn from theconsignment stores. Only then does the vendor require payment. The invoice is due at set periodsof time, for example, monthly. In addition, it can also be arranged with the vendor that the ownership

of the remaining consignment material is taken over after a certain period of time

Features

• The consignment stock is managed under the same number as the enterprise’s ownstock. Consignment stock can, therefore, be transferred to the available stock.

• It is possible to define consignment prices in foreign currency. The currency in whichthe order is placed with the vendor applies for consignment withdrawals.

• It is possible to determine period-specific consignment prices.

• The consignment price can be specified in any unit of measure. The conversion factoris stored in the info record.

• Using consignment info records, the enterprise 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 atthe price of the respective vendor.

• A consignment material can be allocated to one of three stock types:o Unrestricted-use stocko Quality inspection stocko Blocked stock

It can be possible to make transfer postings between these three stock types. Withdrawals can onlybe posted from unrestricted stock, however.

Pricing for Consignment Socks

Use

Before a material can be ordered from a vendor or a goods receipt is posted to consignment stock,the consignment price must be maintained for the vendor in an info record. The price is required formaterial valuation and accounting purposes.

If consignment material is ordered from several vendors, the system maintains the consignmentstock separately for each vendor, since the individual quantities of the material can have different

prices with each vendor.



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Procurement of Consignment Material

Use

Consignment material can be procured via purchase requisitions, purchase orders and outlineagreements for consignment material.

Activities

Creating Purchase Requisitions for Consignment Material

The purchase requisitions are maintained for consignment materials in exactly the same way as forother materials. The order category (such as NB) that the system proposes is then accepted as adefault and the item category K (for consignment) is entered accordingly.

Creating Purchase Orders / Outline Agreements for Consignment Materials

The procedure for creating consignment orders is the same as for standard purchase orders oroutline agreements. However, the following should be noted:

• Enter the item category K for the consignment item. To ensure that the goods receipt isposted to the consignment stores and an invoice receipt cannot be generated for theitem.

• Do not enter a net price.

Stocks Movements for Consignment Material

Use

This section describes the different movement types for consignment material.

Posting Goods Receipt 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



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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:

From the Inventory Management menu, choose Goods movement → Goods receipt →

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

1.

2.

3.

4.

5.

Enter the number of the purchase order to which the goods receipt refers. It can also bepossible to enter the plant and storage location.

Select the movement type with Movement type → PO to warehouse. Please ENTER to

display the item overview.

Select the items to be processed and check the quantities delivered. If required, enter astock type in column S. Copy (adopt) the selected items.

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 Managementmenu.

2. On the initial screen choose Movement type → Receipt → W/o purchase order → Toconsignment unr . Enter the plant and storage location. Press ENTER to display thecollective 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 thematerial increases. The consignment stock is available for MRP.

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

Display Consignment Stock

Use

A goods issue can only be posted from consignment stock to consumption if the material belongs tounrestricted-use stock. If the consignment material is in quality inspection or blocked stock, it ismandatory to first transfer it to the unrestricted-use stock.



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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, a consignment material is required to be transferred within a plant from one storagelocation 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 → Vendor Consignment → SLoc unre. to unre. (Storage location unrestricted tounrestricted). 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:o Receiving storage locationo Vendoro Materialo Quantity

5. Post the stock transfer.

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

Transferring Consignment Material to Another Stock Type

If the consignment material is posted to the quality inspection stock or blocked stock, it is mandatoryto 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:o Vendoro Materialo QuantityOnly enter a receiving storage location if the material should be stored in anotherstorage location.

5. Post the stock transfer.

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



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Transferring Consignment Material Into Own Stock

Prerequisites

Supposing it is mutually agreed with the vendor that after six months the enterprise will take overownership of the remaining consignment stock. To do this, carry out the following goods movement:

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 indicatorK).

3. Select Continue. The collective entry screen appears.

4. Enter the vendor, material, and quantity. Only enter a receiving storage location if thematerial should be stored in another storage location.

5. Post the document.

Result

The transfer results in a liability towards the vendor.

Setting Consignment Liabilities

Use

Removing material from consignment stores or transferring material to the enterprise’s own stockresults in liabilities towards the vendor. These liabilities should be settled 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 takingdeliveries and payments into account.

The payment initiation shall be made for consignment withdrawals using the Logistics InvoiceVerification application component.



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Business Process Procedure

1. Creation of Purchasing Info Record for Consignment

1.1. Access transaction by

Via Menu Logistics Materials Management Purchasing Master Data lnfo Record Create

Via Transaction Code ME11

Key T-Code: ME11

Fig-01



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1.2. On “Create Info Record: Initial Screen” screen, fill in the data as below:

Fig-02

Field Name Description R/O/C/D User Action and ValuesVendor Alphanumeric key uniquelyidentifying a vendor

R Enter the vendor number

Material Alphanumeric key uniquelyidentifying the material

R Enter the material number

Purchasing Org. Denotes the purchasingorganization

R Enter the purchasing organization

Plant Specifies the key for aproduction facility orbranch office within thecompany

R Enter the plant number

Info Record Specifies the number thatuniquely identifies apurchasing info record

O Enter the info record number

Info Category Indicator R Flag the indicator:“Standard”: If this indicator is set,the data from the info record isonly adopted in standard POs.“Subcontracting”: If this indicatoris set, the data from the info recordis only adopted in subcontractorders.“Pipeline”: Specifies that the inforecord is used specifically for

pipeline withdrawals.“Consignment”: If this indicator is



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Field Name Description R/O/C/D User Action and Values

set, the data of the info record isonly adopted for the purpose ofprocuring consignment materials.It is mandatory that the‘Consignment’ radio-button will be

flagged to differentiate theconsignment info record withstandard info record document.

Press “ENTER” to access to the‘General Data’ view of the InfoRecord

Legend: R = Required, O = Optional, C = Conditional, D = Display

1.3. On “Create Info Record: General Data” screen, fill in the data as below:

Fig-03



Reminder 1, 2, 3 Number of dayspresenting the timeinterval at which remindersor urging letters/messagesare to be issued to thevendor

R Enter the number A negative number of days meansthat a reminder is to be issued tothe vendor n days prior to a certaindate. A positive number of days meansthat a letter or message urgingdelivery of submission of aquotation etc. is to be issued ndays after the due date.

Order Unit Specifies the unit ofmeasure in which the

R Enter the order unit


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material is ordered

Press “ENTER”


1.4. On “Create Info Record: Purch. Organization Data 1” screen, fill in the data as below:

Fig-04


Tax code A tax category which mustbe taken into considerationwhen making a tax returnto the tax authorities

R Enter the tax code

Net price Price arrived at after taking

all discounts andsurcharges into account

R Enter the net price

Press “ENTER”




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1.5. On “Create Info Record: Purch. Organization Data 1” screen, maintain information asspecified in the table below:

Fig-05


Continue to press ‘ENTER’ tobranch into the ‘Conditions’ tabview where pricing conditions aswell as validity period will bedefined




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1.6. On “Create Gross Price Condition (PB00) : Condition Supplements” screen, maintaininformation as specified in the table below:

Fig-06


Enter the specific pricingconditions for the consignmentpurchasing info record in

.

Then click on icon to return tomain view of the info record




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1.7. On “Create Info Record: Purch. Organization Data 1” screen, maintain information asspecified in the table below:

Fig-07


Should text information is requiredto be maintained in either ‘InfoRecord Item Note/Text’ or

“Purchase Order Text” field, thenthe “Texts’ view will be selected




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1.8. On “Create Info Record: Text Overview” screen, fill in the data as below:

Fig-08


Click on icon to save thisConsignment Purchasing Info

Record.Legend: R = Required, O = Optional, C = Conditional, D = Display



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Fig-09



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2. Maintenance of Goods Receipt for consignment stock


Via Menu Logistics Materials Management Inventory Management

Goods Movement Goods Movement (MIGO)

Via Transaction Code MIGO

Key T-Code: MIGO

Fig-10



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2.2. On “Goods receipt Others” screen, fill in the data as below:

Fig-11


Since it is decided that the stockreplenishment for consignedmaterials will be done without

reference to any purchase order,theoption shall be mandatory selectedin the “Reference Document” field.

Material slip Specifies the identifier onan external document

R Enter the material slip

Branch to tabpage of the GR Item Details whereyou can maintain the materialnumber of your consigned stock inthe ‘Material’ field

Material A description of thematerial

R Enter the material number ordescription

Branch to tab




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Fig-12


Qty in unit ofentry

Specifies the quantity tobe moved in the unit ofentry

R Enter the quantity in unit of entry

Branch to tab




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Fig-13


Special stock

indicator

Specifies the special stock

type

R Enter the special stock type ‘K’

(used purely to indicate that thereceipt is for consignment stockreplenishment)

Plant Plant name R Enter the plant name

Storage location Description of storagelocation

R Enter the description of storagelocation

Goods recipient Specifies the recipient forwhom the material or theservice is destined

O Enter the goods recipient

Text Contain an explanatorytext on the line item

O Enter the text

Press ‘ENTER’ then two additional

tab pages appear – Partner and Account Assignment




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Fig-14


Branch to tab

Vendor Specifies the name of thevendor

R Enter the vendor name to indicatethat this consignment stock is forthat particular vendor

Click on icon to validatethe correctness of data beingentered

Click on icon or icon

to post the GR documentLegend: R = Required, O = Optional, C = Conditional, D = Display



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Fig-15



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3. Maintenance of Goods Issue for direct consumption


Via Menu Logistics Materials Management Inventory Management

Goods Movement Goods Movement (MIGO)

Via Transaction Code MIGO

Key T-Code: MIGO

Fig-16



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Fig-17

Field Name Description R/O/C/D User Action and ValuesSupposing the consumption is fordirect cost center, both‘Transaction/Event’ and ‘ReferenceDocument’ fields are chosen as

and

accordingly

Material slip Specifies the identifier onan external document

R Enter the material slip

Material A description of thematerial

R Enter the material number ordescription

Branch to tab




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3.3. On “Goods issue Others” screen, fill in the data as below:

Fig-18

Field Name Description R/O/C/D User Action and ValuesQty in unit ofentry

Specifies the quantity tobe moved in the unit ofentry

R Enter the quantity in unit of entry

Branch to tab




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Fig-19

Field Name Description R/O/C/D User Action and ValuesSpecial stockindicator

Specifies the special stocktype

R Enter the special stock type ‘K’ (toindicate that this stock issuance isfrom consignment stock instead ofunrestricted use stock of thecompany)

Plant Plant name R Enter the plant name

Storage location Description of storagelocation

R Enter the description of storagelocation

Goods recipient Specifies the recipient forwhom the material or theservice is destined

O Enter the goods recipient

Reason formovement

Specifies a key you canuse to call up a standardtext stipulating the reasonfor a goods movement

O Enter the reason for movement

Text Contain an explanatorytext on the line item

O Enter the text

Press ‘ENTER’ then two additionaltab pages appear – Partner and Account Assignment




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Fig-20


Branch to tab

Vendor Specifies the name of thevendor

R Enter the vendor name whichrepresents the consignor of whichthe consignment stock is to bewithdrawn

Branch to tab




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Fig-21

Fig-22



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G/L account The G/L account in a chartof accounts

O Enter the G/L account

Business area Key identifying a businessarea

O Enter the business area

Cost Center Key uniquely identifying a

cost center

R Enter the cost center

Click on icon to verifythe accuracy of all entries

Once the validation provessuccessful (with green light), thisGoods Issue Document can be

posted by clicking on icon

or icon


Fig-23



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4. Perform Consignment Liabilities Settlement


Via Menu Logistics Materials Management Logistics Invoice Verification

Automatic Settlement Consignment and Pipeline Settlement

Via Transaction Code MRKO

Key T-Code: MRKO

Fig-24



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4.2. On “Consignment and Pipeline Settlement” screen, fill in the data as below:

Fig-25

Field Name Description R/O/C/D User Action and ValuesCompany code The organization unit bywhich consignmentsettlement is to be made

R Enter the company code

Vendor The third-partysupplier/consignor towhich payment ofconsignment settlement isto be made

O Enter the vendor

Plant The organization unitbelonging to companycode for which theconsignment settlement is

to be executed

O Enter the plant

Material The alphanumericuniquely representing thereference number of theconsignment stock beingsettled

O Enter the material number

Document date The date on which thestock issuance (goodsissue) is created

O Enter the document date

Posting date The date on which thegoods issue document isentered into the financialaccounting and/or

controlling

O Enter the posting date



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Materialdocument

The reference number ofthe goods issue ofconsignment stock

O Enter the material document

The indicator indicatingthat the settlement is to be

made for consignmentstock being withdrawn

O Select the indicator

The indicator indicatingthat the system lists thepipeline withdrawals


This selection option, ifbeing chosen, will onlyenable the display ofwhich goods issuedocuments are to besettled for consignmentstock

O Select the button

This option is purposely

selected when theconsignment liabilities isrequired to be settledbased upon the totalwithdrawn quantities. Inmost cases, whatwarehouse/purchasing isdoing is to use ‘Display’mode to view the possibleposting. The ‘Settlement’icon will therefore, beparticularly used by A/Pwhen the validation is as

successful as expected

O Select the button

Once being flagged, thisindicator help determinethe list of all goods issuesfor which settlement to theconsignment vendor hasnot been made


The selection of thisalternative option results inthe production of onlygoods issues which weresettled beforehand


Documentnumber

The key that the systemuses to access to theaccounting document

O Enter the document number

Variant The layout determines thelist format

O Enter the variant

Click on icon




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4.3. On “Consignment and Pipeline Settlement” screen, after making a proper validation ofthe entries, the ‘Settled’ running mode will be chosen:

Fig-26



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4.4. On “Consignment and Pipeline Settlement” screen, the document number represents theactual accounting document being generated automatically after MRKO transaction run:

Fig-27

Documents

Consignment Procedure