Consignment in Sales and ProcurementYou can use consigned inventory, for which inventory ownership and storage are handled by different parties, and select either a basic or extended consignment setup. Note Both setups can be used in vendor managed inventory (VMI). For more information, refer to Vendor managed inventory. Extended consignment In an extended consignment setup, vendor managed inventory (VMI) settings are laid down in a terms and conditions agreement between business partners. Therefore, if you want the item ownership to be consigned, in the Order Terms and Conditions (tctrm1130m000) session, set the Payment field to Pay on Use for a combination of item, business partner, and warehouse (Procurement) or Ship-to Warehouse (Sales). When a (replenishment) order/schedule is created for the defined combination of item, business partner, and (ship to) warehouse, the Payment field on the order line/ schedule (line) is Pay on Use, as retrieved from the terms and conditions. When consignment inventory is consumed, the consumption can be linked to an existing order/schedule. For each consumption, the following is generated:
With extended consignment, you directly link the payment/invoicing for a consumption of consignment inventory to the replenishment order or schedule. The price for the payment/invoicing of consigned inventory is based on the price that is valid at the moment of replenishment or consumption, which you can specify in the Price Determination Based on field of the Order Terms and Conditions (tctrm1130m000) session. Note If LN cannot link the consumption of consigned inventory to an existing order or schedule, the following happens:
For more information on:
Basic consignment In a basic consignment setup, the order and schedule procedures are split into a replenishment part and a payment/invoicing part. Specify the following:
Consignment replenishment If consigned inventory must be replenished:
You can only use the consignment replenishment part of the order/schedule procedure to replenish the consignment inventory. Consignment payment/invoicing If consigned inventory is used:
Caution! In a basic consignment setup, the payment/invoicing for a consumption is not directly linked to the replenishment order or schedule. For more information, refer to Consignment.
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