Procurement and consumption of consigned inventory
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Procurement and Consumption of Consigned Inventory. SAP Best Practices. Purpose, Benefits, and Key Process Steps. Purpose The scenario shows the characteristics of consignment processing. Benefits Automatic posting of goods into vendor consignment stock

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Procurement and Consumption of Consigned Inventory

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Procurement and consumption of consigned inventory

Procurement and Consumption of Consigned Inventory

SAP Best Practices


Purpose benefits and key process steps

Purpose, Benefits, and Key Process Steps

  • Purpose

    • The scenario shows the characteristics of consignment processing.

  • Benefits

    • Automatic posting of goods into vendor consignment stock

    • Less manual FI postings required: Upon goods issue from consignment storage the relevant invoice data is transferred to FI. Periodic invoicing generates and releases the vendor invoices

  • Key Process Steps

    • Goods receipt to vendor consignment stock

    • Transfer posting of vendor consigned stock to own stock

    • Invoice Verification

    • Outgoing payment

    • G/L: Period-end plant


  • Required sap applications and company roles

    Required SAP Applications and Company Roles

    • Required SAP Applications

      • Enhancement package 5 for SAP ERP 6.0

  • Company Roles

    • Production Planner

    • Warehouse Clerk

    • Accounts Payable Accountant


  • Detailed process description

    Detailed Process Description

    • Procurement and Consumption of Consigned Inventory

      • In consignment processing, the vendor provides material and stores it on the customer’s premises. The vendor remains the legal owner of the material until material is withdrawn from the consignment stores. Only then the vendor requires payment. The invoice is due at predefined periods of time, for example monthly. In addition, customers can also arrange with the vendor that they take over ownership of the remaining consignment material after a certain period of time.

      • The daily MRP run creates purchase requisitions for parts that are to be procured on a consignment basis.


    Process flow diagram

    Process Flow Diagram

    Procurement and Consumption of Consigned Inventory

    Event

    Receive Material at Dock

    Incoming Vendor Invoice

    Demand of Consignment Material

    Vendor

    Schedule Lines

    Product. Planner

    Execute MRP, Display Stock Requirement

    Buyer

    Prerequisite:

    Create Info Record for Consignment

    Prerequisite:

    Create Scheduling Agreement, Maintain Source List

    Warehouse Clerk

    Payables Consign.

    Consumption/ Inventory Mat.

    PPV

    Posting Goods Receipt for Scheduling Agreement

    Transfer Posting for Vendor Consigned Stock

    Print GR Slip

    Accounts Payable

    Payables Consign.

    Vendor

    Tax

    Settle liabilities periodically

    MRP = Material Requirements Planning, PPV = Purchase Price Variance


    Legend

    Diagram Connection

    Legend

    <Function>

    Hardcopy / Document

    External to SAP

    Financial Actuals

    Business Activity / Event

    Budget Planning

    Unit Process

    Manual Process

    Process Reference

    Existing Version / Data

    Sub-Process Reference

    Process Decision

    System Pass/Fail Decision


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