Inventory Change Orders

You can use inventory change orders to:

• Change the ownership of items
• Allocate the inventory
• Generate cost peg transfers

• Inventory ownership

  When the ownership of an item changes, payment is due and invoicing is initiated. Inventory ownership change orders are used to change the ownership of the inventory from supplier to customer and vice versa. In traditional, non-VMI business scenarios, the ownership of an item changes from the supplier to the customer after the customer has received the item from the supplier. The customer must pay for the item on receipt of the goods. In various subcontracting scenarios, ownership will not change during any of the inbound or outbound warehousing processes. In such cases, the ownership is customer owned. In vendor managed inventory ( VMI) scenarios, the ownership can be consigned. If the ownership is consigned, the ownership change is either time based or consumption based.

  • Time-based ownership change

    If the ownership change for consigned goods is time based, according to the contract drawn up between the supplier and the customer, the ownership of the inventory changes:

    • After receipt, according to legal requirements.
    • After receipt, as specified in the contract drawn up between the supplier and the customer.
    • After the latest transaction. The ownership changes after a number of days in which no receipts or issues have taken place. This applies if the basic ownership rule is consigned, and no receipts or issues (consumptions) have taken place in a particular period specified in the contract.

  • Consumption-based ownership change

    If the ownership change is consumption based, according to the contract drawn up between the supplier and the customer, the ownership of the goods changes from the supplier to the customer when the customer consumes the items for production or sale. After the customer becomes the owner, the customer must pay for the goods.

• Allocation change orders

  The allocation change order is the commission that is used to change the allocation of the inventory. The inventory allocation is changed if an order for which inventory was allocated is cancelled. To change the allocated-to inventory, the specification for a particular item quantity in a warehouse must be changed. The items can be contained in handling units.

• Cost peg transfers

  The cost peg transfer functionality is used to transfer costs between two different pegs (pegged to unpegged and vice versa) within the same warehouse. The cost peg transfers do not physically move the inventory but only transfer the cost of the inventory. You cannot transfer goods across warehouses.

  The business partner must be defined for the ship-from peg and the ship-to peg for cost peg transfers when the ownership of the inventory is Customer Owned. For cost peg transfers, the ownership can only be Company Owned or Customer Owned. The cost peg transfers cannot be generated automatically during the generate outbound advice process for the issue of customer owned materials.

• Cost peg transfers - borrow/loan and payback

  Temporary cost peg transfer (borrow/ loan - payback) functionality enables you to transfer the inventory between the cost pegs temporarily. In this process, the inventory is borrowed from another peg that has the same item linked, but with a later demand. The borrowed inventory is registered with the lending project cost peg even though the inventory is moved to another project cost peg that has an immediate demand (the inventory is only borrowed).