Consigned Inventory

Consigned Inventory

In Consigned Inventory, the suppliers are going to keep the stocks in our battery limits (boundary) but we don’t make the payments for the goods received because the owner of the stock is supplier. But whenever we have a requirement, we’ll move the goods from their battery limits to our area by creating a consigned transaction. An Invoice should automatically generate for the quantity which has moved from supplier battery limit to our limits.

Define an Item in Item Master & give details as shown below

Give List Price

Check the Consigned check box

Define ASL for the item. Navigate to Supply Base > Approved Supplier List & give details as shown below

 Create a Blanket Purchase Agreement for this Item

Assign Blanket Purchase Agreement to ASL Attributes. Navigate to Supply Base > Approved Supplier List à Click on Attributes & give details as shown below

Click on Inventory Tab & give details as shown below

Note that we have mentioned Release Method as Automatic Release. But actually it is of no use because we won’t be creating the releases for consigned inventory

Define Sourcing Rules

Navigate to Supply Base > Sourcing Rules

Either you can use existing sourcing rules or else create a new one. I’ll be using existing sourcing rule

Navigate to Supply Base > Assign Sourcing Rules & add your item

Define Self Billing option at Supplier Level. Navigate to Supply Base > Suppliers à Search by Supplier Name & Click on Purchasing on Left hand side Menu

Click on Self Billing & give details as shown below

Check if you can create the releases. Navigate to Purchase Orders > Releases à Give Blanket PA number

You’ll get an error saying

Next is to create standard PO against the Blanket Purchase Agreement (It is to receive goods in our stores)

Create Receipts for this PO

Now if you want to check as who is the owner of these 50 items in our subinventory then navigate to Inventory Responsibility > On-hand, Availability > On-Hand Quantity

Here we can see that owning party is our supplier only.

Next is to create consigned transactions. Navigate to Inventory Responsibility > Transactions > Consigned Transactions & give details as shown below

Click on Transaction Lines & give details as shown below

Again Check On-Hand quantity

If it is Null then it is our organization. So we can see that for 10 items we are the owner & for remaining 40 our supplier is the owner

Next is to Run the “Create Consumption Advice Report” concurrent program. By default, this concurrent program will not be available in Inventory responsibility. You need to add it manually. In order to do so, check the Request group name in the responsibility & then navigate to Security > Responsibility > Request & add the concurrent program name

Now go back to Inventory responsibility & run the concurrent program

Next concurrent program is ‘PO on Receipt Autoinvoice’. But before running this Request we need to open periods in Accounts Payables. So Navigate to Accounts Payables Responsibility > Accounting > Control Payables Periods & open the periods

Now Run the concurrent program ‘Pay On Receipt AutoInvoice’ from Purchasing responsibility & give details as shown below

This concurrent program will create the invoices

Navigate to Accounts Payables responsibility > Invoices > Inquiry > Invoices & search by Invoice Number. We can see the invoice been created