SAP MM Consignment

Consignment means that a vendor provides you with materials that you store on your premises. The vendor remains the legal owner of the material until you withdraw it from the consignment stores. Only then does the vendor require payment. The withdrawn quantity of the material is invoiced at prearranged intervals (monthly, for example). In addition, you can also arrange with the vendor that you include any remaining consignment stocks in your own stock after a certain period of time.

SAP R/3 meets the following requirements for the management of consignment stock:

• The consignment stock is managed under the same material number as your own stock. This enables you to include consignment stock in the available stock of a material.
• Consignment stocks of the same material from different vendors are managed separately and at the respective vendor's price.
• Consignment stocks are not valuated. When the material is withdrawn, it is valuated at the respective vendor's price.
• A consignment material can be managed in one of three stock types:

- Unrestricted-use stock

- Stock in quality inspection

- Blocked stock

You can make transfer postings among all three stock types. However, withdrawals can be made only from unrestricted-use stock.