Linking consumptions to the replenishment order/schedule

Subcontracting order

To link a consumption line to a subcontracting purchase order, LN first utilizes the subcontracting reference, and then the consumed item to locate the relevant material supply line matching the subcontracting purchase order. The material line with an item that matches the inventory consumption line's item is selected.

For costing purposes, the used material must be booked on the correct subcontracting purchase order. Therefore, the Subcontracting Reference field in the Inventory Consumption Lines (tdsls4141m000) session is mandatory.

Usually, the subcontractor is not invoiced for material that is supplied by the manufacturer and consumed by the subcontractor to produce the items for the manufacturer.

For consumption lines that are linked to an operation subcontracting, item subcontracting, or service subcontracting material supply line, the Consumed Quantity field is updated in the Purchase Order Material Supply Lines (tdpur4116m000) session, after receipt of a consumption message from the subcontractor. Consequently, the inventory levels are updated. For more information, refer to Adjusting inventory level in the administrative warehouse.

VMI order or schedule

To link a consumption line to a vendor managed inventory (VMI) order or schedule, LN uses the combination of reference and shipment reference to search for a matching sales schedule. Next, the packing slip is used to search for a matching sales schedule shipment. Finally, the customer order/schedule reference is included in the search.

In a VMI environment, the customer order or schedule reference is not mandatory. If an inventory consumption line includes a customer order/schedule reference, LN searches for a sales order or sales schedule with a matching Customer Order or Customer Contract Reference. If a matching reference number is not located, LN searches for the first sales schedule line with a matching Customer Schedule Number. Consumption lines are linked to this specific sales schedule, although consecutive schedule lines can have a different customer schedule reference.

If the payment is set to Pay on Use, inventory levels are updated and invoicing is triggered. For the order/schedule lines linked to the consumption line, LN creates invoicing lines in the Sales Order Invoice Lines (tdsls4106m100) or the Sales Schedule Invoice Lines (tdsls3140m200) session.

If the payment is set to Pay on Receipt or No Payment, only the inventory levels are updated. For more information, refer to Adjusting inventory level in the administrative warehouse.

If no packing slip or customer order/contract/schedule reference is available and the Invoicing Required check box is selected:

1. LN searches for the oldest sales order/schedule with payment type Pay on Use that is not yet fully consumed. If a matching sales order/schedule line is found, LN creates an invoice line linked to that sales order line or sales schedule (line).
2. If no matching line is found, LN creates a consignment invoicing sales order based on the Consignment Invoicing Order Type field in the Sales Order Parameters (tdsls0100s400) session.

If a Pay on Use sales order/schedule line is used and the total consumed quantity exceeds the ordered quantity, LN creates an invoicing line for the part that "fits". For the remainder, LN searches for other Pay on Use sales order/schedule lines to create invoicing lines. For the consumed quantities for which no sales order/schedule line is found, LN creates a consignment invoicing sales order.

For each invoice line created, LN updates the inventory levels with the invoiced quantities. For more information, refer to Adjusting inventory level in the administrative warehouse.

Sales consignment invoicing orders with origin Consumption

If a consumption cannot be linked to a replenishment order, a sales consignment invoicing order is generated to settle the invoicing of the consumed quantity. For these orders, their origin is Consumption and their order type is retrieved from the Consignment Invoicing Order Type field in the Sales Order Parameters (tdsls0100s400) session.

Updating inventory levels for these orders is handled by Warehousing, because warehouse activities are part of the order procedure of a sales consignment invoicing order.

After a consignment invoicing order is released to Warehousing, inventory level adjustments are handled by the outbound process. You must set the activities of the warehousing order type that are linked to the consignment invoicing order type to automatic. For more information, refer to To define warehousing procedures.