Consignment Process for a Material Type

[Former Member]

Hello,

I am working on a project where there is a need to change one material type or a raw material to be procured on consignment. I know the consignment process and with the help of Kernel Team, we do have a glitch though and could not figure out how to resolve this issue. So the stock the client already has in the system also has to be converted to consignment stock. Can someone help me explain how this can be done? The client uses batch management for this material and there is some kind of relationship between the pallets and the original product that is maintained in the shop floor system and I am not sure if we do this change it will affect that and we end up having issues with shop floor system.

Pls help. If you have any questions, pls post and I will try my best to provide the information.

Thanks.

[JL23 · Accepted solution]

You either loose the SU number or you can't change to consignment. This is just black or white.

As already said by Jagdeep, the material type has not much to do with consignment.

Since you received the goods already into your own inventory they are in your books, while consignment is owned by the vendor and the value is  in the vendors books.

If you posted already an invoice or even paid it, then it is pretty late to think about a cancellation of the process.

If that is not yet done you can cancel the receipt, cancel the PO item and create a new one for consignment and receive that one.

But if you cancel the receipt, then you get a negative quant in storage type 902 and you have to move the stock from the bin to 902 and in that very moment you will loose your SU number.

So it is basically an evaluation by comparing the saved interest if your current stock becomes consignment with the costs that are spend for all these correction postings and relabeling of SU numbers.

[Former Member · Accepted solution]

Thanks Jurgen, That explains to me Warehouse personnel's concern.

[Former Member · Accepted solution]

One more question though. What is required from Master Data side without which the consignment process won't work?

Just had a call with warehouse person and they say that two things are required:

1. In Material Master MRP2 view; Special Procurement should be 10(Consignment)

2. Consignment Info Record

Is the point 1 valid or lets say a must?

They say without this, they will not be able to post GR.

[JL23 · Accepted solution]

MRP2 entry is needed if you want that the MRP run creates automatically consignment requisitions.

It is not at all needed for a GR process.

If you don't do any planning you do not even need the MRP views, you can just create a PO for consignment stock via ME21N from scratch, and this is the reference for the receipt.

The info record is needed for the goods issues.

[Former Member · Accepted solution]

Thanks Again. Really appreciate your prompt response.

[jagdeepsingh83]

Hi Sam

You can have same material code managed as consignment material. Material type does not change when you take the stocks in consignment. The materials that you already have as your own stock, you cannot put them in consignment as those already purchased and you have paid the amount for them.

Movement type use convert consignment stock to your stock 411+K, so 412 do the reverse of it. But does your vendor going to pay the amount for conversion you are doing.. Consignment means you have no ownership.

If you can post what is Kernel team have to do with consignment process and post the errors we may able to help you.

[Former Member]

Thanks Jagdeep. I think I was not able to express the question properly. Shouldn't have mentioned about the material type at all. Whatever you said is correct. But as explained below by Jurgen I was worried about the WM side of it.

[Former Member]

The client also has WM implemented so some additional concerns from Warehouse personnel:

My concern is not so much on the logistic processing side.  I need a way to issue the material out of MM only, change the items and info records to consignment, and then bring the material back into inventory provided that the material table data should stay linked to the pallet and the SU# stay the same as is in the system and should not change by this movement of stock from unrestricted to consignment.  My other concerns are on the shop floor system side….regarding the material ordering rules and returns to stock.