SAP Consignment Process (SD Module)

SAP Consignment Process (SD Module)

First, when we talk about consignment goods, we refer to items that your company owns but are stored in a warehouse designated by the customer.

 

In other words, since it is your company’s inventory, you must manage the stock by keeping track of how much the customer has taken and how much remains.

 

The customer can withdraw the consignment goods when needed (at which point an invoice will be issued) and can return them when they are no longer needed.

 

Like any business, this ultimately involves money, so it’s important to note at which stage the ownership of the inventory changes when the customer takes items or returns them, as well as when billing or credit memos are generated.

 

In SAP, consignment stock is managed as special stock. When you query the inventory list (using transaction codes like 'MMBE' or 'MB52'), this type of stock will have a unique identifier separate from other stock.

 

Since it is inventory meant for a specific customer, it is allocated to that customer. If this consignment stock is not directly controlled by your company but instead by a third party, it can be registered and operated as special stock partner.

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Source: SAP - Customer Consignment Process ​

출처:SAP -Customer Consignment Process

 

In SAP, the act of bringing products to the warehouse designated by the customer is referred to as:

 

1. Consignment Fill-up (Stock fill up to the customer's warehouse or designated place).

• When goods issue is processed, the stock type changes from unrestricted stock to consignment stock.
• The standard order type is 'KB'. When creating a new order type, it can be referenced for use.
• This is independent of pricing (billing) processing; the inventory still belongs to your company.

In the process where the customer takes stock from the designated warehouse for use:

 

2. Consignment Issue (Stock issue from the customer's warehouse or designated place).

• This is used when the customer takes items from consignment stock for use or sales purposes.
• The inventory is transferred from your company to the customer.
• The standard order type is 'KE'. When creating a new order type, it can be referenced for use.
• In this process, since the inventory is attributed to the customer, the customer sales (billing) step occurs.

When a product is returned from the customer-designated warehouse to your factory (warehouse) due to a product defect (customer claim):

 

3. Consignment Return (Stock return from customer).

• When goods issue is processed, the customer’s special stock (consignment inventory) increases.
• Since ownership of the inventory reverts back to your company, billing processing (credit memo) occurs.
• The standard order type is 'KR'. When creating a new order type, it can be referenced for use.

When the customer no longer needs the inventory and transfers it back from the designated warehouse to your company:

 

4. Consignment Pick-up (Stock return to your plant (supplier)).

• When goods issue is processed, the special stock is deducted, and the quantity of inventory in your plant increases. In other words, the inventory status changes from being assigned to a specific customer to unrestricted stock that can be sold to other customers.
• The standard order type is 'KA'. When creating a new order type, it can be referenced for use.

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[References]

All About Consignment Process in SAP SD (guru99.com)

Blog Series – SAP S/4 HANA Supply Chain for Transportation Management – 06 – Integrated consignment process and consolidation opportunities | SAP Blogs