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SD: Consignment Sales Process

What is Consignment? 

In consignment processes, the products are stored at the customer location, but the owner of this product is still the company. The customer stores the consignment stock in its own warehouse. The customer can consume products from the warehouse at any time and the customer can invoice the amount of products consumed. The customer or the company can also return a seasonal product from the stock. 


If the company sends goods to the customer stock, there is no need to invoice, because the product is warehouse movement rather than sales. 


There are basically 4 different consignment processes, also called stock transfer processes:  

Consignment filling (replenishment) (CF) = KB 

Consignment Output (CI) = KE 

Consignment Returns (CONR) = KR 

Consignment pick-up (CP) = KA 


It is summarised in the table below:  

In order to perceive the consignment processes more clearly, I will use 3 nomenclatures.

  • Company; the first owner of the product,

  • Dealer; the company's business partner, retail and external warehouse,

  • Customer; the end user who receives the goods.  


1. Consignment Filling 

Type of sales document: KB (VOV8) 

Pen Type: KBN (VOV7) 

Termin Type: E1 (VOV6) 


This is the process in which the company's products are stored at the dealer and the company owns the products. Only ordering and delivery takes place. In this process, it is recommended to enter PO number and PO date when opening a sales order (option). Material 631 makes the movement. The most important purpose of this process is to ensure that the product is on the shelf and to speed up the shipment process. 

 

2. Consignment Release 

Type of sales document: KE (VOV8) 

Pen Type: KEN (VOV7) 

Termin Type: C0 or C1 (VOV6) 


In this process, let's say your dealer sold a product to the customer. You invoice your dealer for selling goods from consignment stock. In other words, as a company, you will have made a successful sale to your dealer. Let's imagine that you sent 10 refrigerators in the first scenario. When 1 refrigerator is sold to the customer, as if it is sold from your company's imaginary stock, as much as the product sold to the customer to invoice your dealer; you complete as order + delivery + invoice. 

  

3. Consignment Return 

Type of sales document: KR (VOV8) 

Pen Type: KRN (VOV7) 

Termin Type: D0 (VOV6) 


In this process, the customer returns the product to the dealer (consignment warehouse) with the reason for the return. Since there is a re-entry of goods into your company's fictitious stock, you need to issue a return order, return delivery and return invoice. 

 

4. Receiving from Consignment 

Type of sales document: KA (VOV8) 

Pen Type: BLOOD (VOV7) 

Termin Type: F0 or F1 (VOV6) 


In this process, the dealer may return your products to your company. For example; If a product with a short shelf life is in the dealer warehouse, it may not want to keep it in its warehouse because the consumption date is approaching. In this process, no invoice is issued because the products still belong to the company. You can withdraw your products from the consignment warehouse to the company warehouse with return delivery and return order. 

 

Note: You can adapt the delivery and invoice documents as standard because the goods movements of the materials are determined from the term type.


Mert Bengü

SAP SD Consultant at Melasoft GmbH


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