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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 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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  1. Procurement and Consumption of Consigned Inventory SAP Best Practices

  2. 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

  3. 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

  4. 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 The vendor remains the legal owner of the material until material is withdrawn from the consignment stores.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.

  5. 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

  6. 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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