Vendor Consignment in SAP MM

Consignment in Real Business

As a business deal you have an agreement  with a vendor to source a particular number of consignment material to your organization. The consignment material value is still retained by the vendor until you take out it from the consignment inventory or post it to own valuated stock. You take possession of the material when you issue to a cost centre or handover it into your own stock. You settle your consignment liabilities with the vendor monthly. As a SAP MM consultant you want to set up this scenario in SAP system.

Special Procurement Vendor Consignment

Vendor Consignment in Material Management

As described above in first paragraph, consignment means that material made accessible to you by a vendor is stored in your company but truly valued to the vendor. A liability to the vendor only rises when you pull out material from the consignment stocks. The following section roughly outlines the entire vendor consignment process Details on the individual steps are covered in the further sections.

To manage material in the consignment stock. you need the following master data:

•  Material master record: If you manage the relevant material as your own material, you do not need to create a new material master record for the consignment material. By using the same material number, the consignment stock can be included in the unrestricted-use stock of a material.
• Vendor master record for the vendor of the consignment material.
• Purchasing info record with Consignment info category for the consignment vendors and consignment material.

To request consignment goods from vendors, create a purchase order with a special consignment item. With reference to the consignment item, posting is made directly to the consignment stock of the affected vendor dining goods receipt (GR). It is also possible to post another goods receipt into the consignment stock The system does not valuate the consignment stock during the goods receipt.

If material is withdrawn from the consignment stock, for example. for production, the withdrawal is valuated with the price of the vendor that is defined in the consignment info record. For the settlement of withdrawals, there is a special report