SAP Vendor Consignment Process

Vendor Consignment or Vendor Managed inventory is used to reduce the inventory stock levels ,Procurement Lead time,just in time supply which results reduction in inventory carrying cost for organizations.

Step 1-Info Record Creation (Consignment)

Info record is combination of Material Code, Vendor and Category Consignment.

Info Record plays central role in consignment process so it is very necessary to maintain all purchase related details in info records like price, tax code, Inco terms, payment terms etc


Consignment Info Record Creation

There can be single info record for the above combination ( If price change is required then we need to set the delete flag to first info record after that system will allow to create another info record for price change.)

Step 2- Consignment PO Creation

Item Category -K denotes Consignment

Buyer need not to enter Price, system would auto pick up price, tax code from info record (Step-1)

Consignment PO Creation

info record can also be generated automatically on basis of previous transactions.


Step 3-GRN against PO

Here we can’t capture Excise Capture against GR doc because excise base rate is zero. (PO has no price) so excise part become lengthy for consignment

No Accounting entry (Here purpose of mvt Ty 101 is to update only qty in our system,valuation will be hit at the time of goods issue)

Stock Overview

Stock in Quality Inspection

Consignment Stock

Step 4-Usage Decision (Inspection Approval)

Accept material by using UD Code A

Stock Overview after UD

Consignment Stock

Step 5 Consumption from Consignment Stock Direct (Mvt type 201 K)

Post goods issue by MB1A (Cost Center and Vendor code are mandatory entry)

Consignment Stock Issue

Accounting Entry

Accounting Entry

Step 6-Consignment Settlement (MRKO)

In normal procurement cycle vendor provides Invoice after goods supply.

In Consignment Process vendor already placed his stock at our place and billing will be done as per goods issue so it is our responsibility to inform vendor for sending invoice.

Here system picks up all consignment valuated docs (201 or 202) and settle them in background

as earlier mentioned PO has no value so at the time of settlement system pick up value from info record (Step 1)

Consignment Settlement

In below example system displayed 2 docs for settlement

Consignment Settlement Pending

Settlement

Screen shows 2 kind of settlement i.e. pipeline and consignment, in our case consignment type settlement is applicable, with the help of this screen we can also access previously settled documents(Processing- Settle) while selection option settle for real time settlement.

Consignment Settlement
Accounting Entry

Accounting Entries after settlement

Accounting Entry

Excise Capture

As shown in Step no 3 excise has not captured against GR Doc

Here PO has no value and GR doc (101 mvt type) will be without accounting entry. Accounting will hit at the time of Goods Issue( Consumption).

Excise need to capture in J1IEX with out PO Option

Excise Invoice Without PO

Accounting Entries

Accounting entries for consignment shows that consignment cleaning account debited which will be clear at the time of settlement and then after vendor Payment.

Excise Accounting Entry

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