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Consignment Process in SAP

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77 views15 pages

Consignment Process in SAP

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RP Tech
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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1

CONSIGNMENT
PROCESS IN SAP

Phone/Whatsapp: +1 (515) 309-7846 (USA)


Email: [email protected]
Website: www.zarantech.com
1 1

Consignment Process

What is Consignment Process?

This is a Special procurement process & In this Process, the Vendor Provide Material to the
Company and store them on company premises, but the ownership of the material belongs
to the vendor until the company withdraws or issue material from the Consignment stock.

When the Company issue material from consignment stock then the company is liable to
pay money to the vendor.

This process is used in manufacturing Companies, Automobile Industry, supermarkets etc.

Example: Tyre Manufacturer provide tyre to an Automobile Company and stores them in the
Automobile Company's premises & once the consumption of Tyre is started by the Buyer
Company for vehicle production then the company will pay money to the tyre Supplier based
on the consumption of tyre.

Prerequisite points:
1. Consignment Info record Should be maintained With Price and Tax Code for material
against the vendor.
2. Conditions record should be maintained for conditions type KON using T code MRM1.
3. If you have several purchase organizations then you need to assign one purchase org to
plant as Standard Purchase org to determine the Info record for settling the withdrawal of
material.
The speciality of Process:
1. System does not allow to put the price in Consignment Purchase Order, the price will take
from the Consignment Info Record during Settlement process.
2. Consignment Stock is a special kind of stock. The stock is lying at the Company Storage
Location, but the responsibility belongs to the vendor.
3. Consignment stocks are not valuated when GR Posted. It is valuated when transferring
from consignment to own stock.

Phone/Whatsapp: +1 (515) 309-7846 (USA) Email: [email protected]


www.zarantech.com
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Why Consignment Process Use:

1. Company can consume material any time as per their requirement.


2. Company No need to pay money to supplier after GR, Will pay money after material
consumption.
3. Material Transportation time will save.
4. No need to create Number of PO for Material.
5. Company can fulfill the urgent requirements of customers.
6. Storage space will save At the supplier's end because they are keeping material on
company premises.
7. Suppliers will easily beat market competition so that sales & profit will increase.

Configuration required for Consignment Process:


1)Activate the Consignment Info Record: T Code- OMEV

SPRO Path > SAP reference IMG > Materials Management > General Settings for Material
Management > Activate Consignment Prices via Info Records

Phone/Whatsapp: +1 (515) 309-7846 (USA) Email: [email protected]


www.zarantech.com
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2) Assign standard purchase organization to Plant: T Code- OMKI

SPRO path > SAP reference IMG > Enterprise Structure > Assignment > Materials
Management > Assign Standard Purchasing Organization to Plant

If you have several purchase organizations, then you need to assign one purchase org to
plant as Standard Purchase org to determine the Info record for settling the withdrawal of
material. Otherwise, the system will not be able to create an Invoice through T code MRKO.

3) Assign Special Procurement type in material master (MRP 2 tab) – T Code MM01/MM02

We assign Consignment into material master as a special procurement type Hence indicates
that material will procure by consignment process.

Phone/Whatsapp: +1 (515) 309-7846 (USA) Email: [email protected]


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4) Create Vendor & mark Check box “GR Base Invoice Verification” in Purchasing Data:

T Code-XK01

Phone/Whatsapp: +1 (515) 309-7846 (USA) Email: [email protected]


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5) Maintain Condition record for Output type KONS. T Code MRM1

6) Maintain G/L Account for Transaction event Key KON. T Code OBYC

Phone/Whatsapp: +1 (515) 309-7846 (USA) Email: [email protected]


www.zarantech.com
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7) Create Consignment Info record, If PIR is not created, System will not be able to
determine the Price during settlement & we cannot put price in po manually.

T Code: ME11

Here TAX Code & Price is mandatory to maintain.

Phone/Whatsapp: +1 (515) 309-7846 (USA) Email: [email protected]


www.zarantech.com
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Process Flow
6)Create Consignment PO with Item Category - K

T Code ME21N

Standard PO created under the number 4500025944

Phone/Whatsapp: +1 (515) 309-7846 (USA) Email: [email protected]


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7) Post Good Receipt for PO with Movement type 101K. T Code: MIGO

Phone/Whatsapp: +1 (515) 309-7846 (USA) Email: [email protected]


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When we Post GR using Mvt. Type 101K, Accounting document/ Accounting entries will not
be created hence this stock will be Non valuated Consignment Stock

8) Stock Overview: T Code- MMBE: Consignment stock Updated for Vendor

Phone/Whatsapp: +1 (515) 309-7846 (USA) Email: [email protected]


www.zarantech.com
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9) Issue material from Consignment stock:

here we transfer material from vendor consignment stock to Own stock for uses Using T
code MIGO/MB1B

T Code: MIGO

After Transfer Posting for 10 Qty, Material Document created: 4900000945 & Accounting
Document Created: 4900000587

Phone/Whatsapp: +1 (515) 309-7846 (USA) Email: [email protected]


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When we transfer stock from Consignment to Own stock with Mvt type 411K then stock
becomes Valuated.

Accounting Entries

Accounting Entries

10)TCode MMBE: Now you can see Consignment stock (10 Qty) transfer to unrest. Own
stock

OLD stock 50 qty + New Stock 10 Qty= 60

Phone/Whatsapp: +1 (515) 309-7846 (USA) Email: [email protected]


www.zarantech.com
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11) Consignment Settlement/Post Invoice (T Code - MRKO)

➢ Display Mode:

➢ Settlement Mode:

Phone/Whatsapp: +1 (515) 309-7846 (USA) Email: [email protected]


www.zarantech.com
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Accounting Entries after Invoice 5100000028 Posted.

Accounting Entres After Vendor Payment.

Conclusion: In this Article we learned how Consignment Process run in the industry.

Phone/Whatsapp: +1 (515) 309-7846 (USA) Email: [email protected]


www.zarantech.com
THANK YOU

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