Vendor Consignment Process

8/21/2019 Vendor Consignment Process

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Vendor ConsignmentProcesscreated by Sanil Bhandari on Sep 17, 2013 7:33 AM, last modifed by Sanil Bhandari on Sep17, 2013 8:07 AMVersion 1inShare

What is Vendor Consignment? Vendor onsi!nment is a process "herein the s#pplier pro$ides materials and stoc%s them in thep#rchaser&s premises' (he material remains in the boo%s o) the s#pplier *$endor+ #ntil the same is"ithdra"n )rom the stoc% o) the consi!nment and p#t to #se' (he in$entory !ets trans)erred to theboo%s o) the p#rchaser only "hen the same is remo$ed )rom the consi!nment stoc%' (he s#pplier*$endor+ "o#ld not in$oice the p#rchaser initially "hen they come into the premises o) the p#rchaser' (he p#rchaser is liable to pay the s#pplier *Vendor+ only "hen the stoc% is "ithdra"n *cons#med+' Key Process Design for the Consignment process for Vendors in SAP

onsi!nment has been desi!ned as a special proc#rement type in SA- (he consi!nment stoc% is not $al#ated till the time it is cons#med or "ithdra"n, since theoretically, it

lies in the boo%s o) the s#pplier *Vendor+ (he consi!nment material n#mber is the same as that o) a material in #nrestricted stoc% in the

p#rchaser&s boo%s Since the so#rcin! o) a material can happen )rom m#ltiple parties, the consi!nment stoc% is

maintained at the le$el o) each s#pplier or $endor' (he price o) the consi!nment is maintained in the p#rchasin! in)o records *-./+ o) the in)o cate!ory,

onsi!nment hen the "ithdra"al happens )rom the consi!nment stoc% o) a s#pplier, the !oods receipt in the

p#rchaser&s boo%s happens at the price maintained in the p#rchasin! in)o records o) type consi!nment)or that $endor and material combination'

(he !oods receipt a!ainst a consi!nment p#rchase order is al"ays non $al#ated

Basic Conguration Steps for Vendor Consignment Process in SAP

1' 1' Acti$ate -#rchasin! .n)o /ecord )or .n)o cate!ory as onsi!nment' (he onf!#ration transactioncode )or the same is MV'

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1' 2' onf!#re the special proc#rement type 10' (his is done in .M 4ode:

.M5-rod#ction5Material /e6#irement -lannin!5Master ata5efne Special -roc#rement (ype

3' Assi!n the special proc#rement type in the material master' (he Master ata transaction code )orthe same is MM02' (his is done in M/-2 $ie" o) the material master

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' reate a p#rchasin! in)o record *-./+ o) the cate!ory, onsi!nment' (his is done#sin! the transaction code M11'

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9' Maintain the a#tomatic acco#nt assi!nment )or material postin!' (he belo" transaction need to bemaintained in the conf!#ration transaction code B

a' onsi!nment -ayables : ;4 b'


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Consignment Process Steps in SAP (he consi!nment process steps in SA- are )airly simple' .t in$ol$es creatin! a p#rchase order, doin! a!ood receipt and a "ithdra"al o) the stoc% )rom Vendor&s boo%s' (he last step in the consi!nmentprocess )or a $endor is the settlement o) the $endor&s liability' (he steps are hi!hli!hted as:

1' 1' Procurement - A standard p#rchase order is created "ith item cate!ory as ; #sin! the transactioncode M214' (here is no price "hich is applicable )or a consi!nment p#rchase order and hence sho#ldnot be entered at the time o) creation o) p#rchase order'



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(he !oods receipt is done #sin! the standard transaction code M.' (he stoc% is posted asconsi!nment stoc% "itho#t $al#e' (he same "o#ld re@ect as a special stoc% )or the $endor' Since thematerial lies in the p#rchaser&s premises, the same "o#ld be re@ected in terms o) 6#antity at a stora!elocation as "ell till the time the same is cons#med )or #se' (he same can be chec%ed in the standardstoc% reports in transaction code li%e MMB' (here is no acco#ntin! doc#ment "hich is created "henthe /4 is done in case o) a cons#mption p#rchase order'



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1' 2' Consumption – ons#mption o) consi!nment material happens "hen !oods iss#e is done "ith itemcate!ory ;' (he price at "hich the !oods iss#e "ill be done "ill be pic%ed )rom the p#rchasin! in)orecord "hich has been created )or consi!nment )or the material and $endor combination' .n thispartic#lar case, to elaborate the process a prod#ction order "as created and a !oods iss#e "as done"ith the item cate!ory ; a!ainst the prod#ction order' enerally the consi!nment materials are part o) Bill o) Materials *BM+' oods iss#e doc#ment is posted in s#ch a case "hen acti$ity confrmation isdone )or the prod#ction order thro#!h transaction code 19'



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.n the abo$e case, the price is pic%ed )rom the p#rchasin! in)o record "hich "o#ld ha$e been created)or the material and $endor combination'

3'1' 3' Settlement – (he ne


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(his "o#ld display the "ithdra"als )rom the consi!nment stoc% "hich ha$e ta%en place and )or "hichthe liability )or the $endor has not been created' o# also ha$e the option to chec% the acco#ntin!entries )or the "ithdra"als )or cons#mption made )rom the consi!nment stoc% )or a $endor'



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A)ter analyin! the #nsettled "ithdra"als, yo# can create the $endor liabilities by selectin! Settle )romthe main screen' (his "ill settle the o#tstandin! entry in onsi!nment Acco#nt -ayables acco#nt and

create a $endor liability' (he price o) $endor liability creation "ill happen at the .n)o /ecord -rice'



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Accounting Entries

1' 1' At the time o) oods /eceipt ? 4o Acco#ntin! entries are !enerated at the time o) !oods receipt

2' 2' At the time o) ithdra"al or ons#mption o) onsi!nment Stoc% ?

*a+ a' (he material is $al#ated at mo$in! a$era!e -rice *-rice ontrol in Material Master is VC+

ons#mption Acco#nt / *Acco#nt Assi!nment BBBVB/+ (o onsi!nment -ayable A=c *Acco#nt Assi!nment B;4+

(he #nit $al#e o) material comes )rom the .n)o record -rice )or material $endor combination)or in)o cate!ory onsi!nment

*b+ b' (he material is $al#ated at standard price *-rice ontrol in Material master is S+

ons#mption A=c / *Acco#nt Assi!nment BBBVB/+ (o onsi!nment -ayable A=c *Acco#nt Assi!nment B;4+ -rice i>erence A=c *r=r+ *Acco#nt Assi!nment BA;+

1390 Vie"s

-rod#cts: sapDerpDfnancials (opics: enterpriseDreso#rceDplannin!
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Vendor Consignment Process