SAP MM Vendor Consignment Process

Vendor Consignment Process In Sap Mm

Accepted Solutions (1) Create Consignment inforecord in tcode ME11. Create PO with Item category as “K” in Tcode ME21N. DO the GRN with MVT 101 + K in tcode MIGO. Transfer consignment stock to your own stock in MVT 411 K in tcode MIGO. Do the Vendor Settlement in Tcode MRKO. More items

Understanding the Vendor Consignment Process

The purpose of this arrangement is to allow the buyer to have access to necessary materials without having to pay for them upfront. This can be beneficial for both parties as it helps manage inventory levels and cash flow. Once the buyer uses or sells these consigned materials, then they will be responsible for paying the vendor accordingly.

Vendor Consignment Process in SAP MM: A Step-by-Step Guide

The procedure for handling vendor consignments is outlined below, providing a detailed step-by-step approach.

Consignment Info Record

To initiate the vendor consignment process in SAP MM, begin by creating a Consignment Info Record using transaction ME11. In order to modify an existing Info Record within SAP, you can utilize transaction ME12. This particular tutorial assumes that an Info Record has already been established as part of the preparation for this process.

To initiate the consignment process in SAP MM, you must choose the option for Consignment and input details such as Vendor, Material, Purchase Organization, and Plant. Once done, simply press the Enter key to proceed.

Enter the price in the designated box within the Purchasing Organization view and proceed to save the information record.

Consignment Purchase Order

To initiate the consignment purchase order (PO) creation, open the dialog box and access transaction ME21n.

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In the purchase order, input the Vendor, Item Category: K, Material, Quantity, Plant, and Storage location as shown in the screenshot provided. Press the Enter key on your keyboard to proceed.

Then, click on Check button, to check for errors in the document.

Lastly, press the Save button to store the document and a notification will appear from the SAP system confirming that a purchase order has been generated.

Goods Receipt Process in SAP MM

In order to perform Goods Receipt for a Purchase Order, the transaction MIGO must be utilized.

On the screen below, select “Goods Receipt against Purchase Order” and input the previously generated purchase order number. Afterward, press the Enter key.

The SAP system retrieves information from the Purchase Order in MIGO. Then, you need to select the OK checkboxes for each item.

Mark the items as “OK” to indicate that a goods receipt needs to be performed.

Then, click on Check button to check for possible errors.

To save the document, simply click on the Post button. The system will then show a notification confirming that a material document has been successfully posted.

Goods Issue Process in SAP MM

When there is a need for goods, you can initiate Goods Issue to a specific cost center. This can be done using the MIGO transaction in SAP MM. In this process, it is important to select “Goods Issue against Other” and use movement type 201 along with the special indicator K for consignment.

In the Material section of the MIGO transaction, input the specific material number for issuing from the warehouse.

In the Quantity section of the MIGO transaction, input the necessary quantity for issuance.

In the Where section of the MIGO transaction, input the Plant and Storage Location from which you wish to release the materials.

In Partner tab of MIGO transaction, enter the vendor number.

In the Account Assignment section of the MIGO transaction, you can input a cost center to assign the material costs to that specific cost center.

Click on Check button to check for possible errors.

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To save the goods issue document, simply click on the Post button. The SAP system will then show you the material document number that has been posted.

Liabilities Settlement Process in SAP MM

Finally, the last step of vendor consignment process in SAP is to settle the liabilities that our company has for the vendor. It is necessary to use the transaction MRKO for settling liabilities created against the vendor.

The SAP system will display a list of consignment materials eligible for settlement. By double-clicking on the specific line item and saving the document, the vendor consignment process in SAP can be completed successfully.

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What does the SAP movement type 411K mean?

When you initiate a 411K transaction, it signifies that you are taking ownership of the previously held consignment stock. By moving it into your unrestricted use stock, you gain full control over these items and can utilize them as per your requirements. However, this transition also entails fulfilling your financial obligation towards the vendor by settling any outstanding payments associated with this consignment.

By executing a 411K transaction in SAP MM, you effectively convert consignment inventory into regular inventory within your organization. This conversion allows for better tracking and management of these goods since they are no longer considered under temporary custody but become part of your permanent inventory.

What does consignment processing entail?

The purpose of this arrangement is to provide convenience and flexibility for both parties involved. The customer can have immediate access to a wide range of products without having to invest in purchasing them upfront. At the same time, it allows the company to maintain control over their inventory while ensuring that their products are readily available for customers when needed.

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To facilitate this process, companies often use SAP MM (Materials Management) module which provides functionalities for managing vendor consignments effectively. With SAP MM, companies can track and monitor consignment stock levels accurately, generate reports on stock movements and consumption patterns, as well as manage billing and payment processes seamlessly.

The consignment settlement process in SAP: A brief overview

1. Create Consignment Info Record: This is a mandatory step where you set up an information record to maintain details about the consignment arrangement with your vendor.

2. Create Consignment Purchase Order: Once the info record is created, you can create a purchase order specifically for consigned goods. This PO ensures that the stock received from the vendor will be considered as consignment stock.

3. Goods Receipt for Vendor Consignment Stock: When you receive the goods from your vendor, you need to perform a goods receipt transaction in SAP MM to update and increase your inventory of vendor consignment stock.

4. Transfer Posting to Unrestricted Stock: If there comes a time when you want to use or sell some of the items from your consigned stock, you need to transfer them from consignment stock to unrestricted stock through a transfer posting transaction.

– Step 1 involves creating an info record.

– Step 2 includes creating a purchase order specifically for consigned goods.

– Step 3 requires performing a goods receipt transaction.

– Step 4 entails transferring items from consigned stock to unrestricted stock.

– And finally, step 5 involves settling with the vendor based on usage/sales made.

The purpose of vendor consignment in SAP MM

During the consignment process, the ownership of the materials remains with the vendor until they are actually consumed or used by the company. The company only pays for what it uses, eliminating any financial burden of holding excess inventory. This also helps in reducing storage costs and minimizing risks associated with obsolete or slow-moving inventory.

P.S: It is important for companies using SAP MM (Materials Management) module to properly manage their consignment processes as it involves tracking and recording material movements accurately within their systems.