SAP Consignment Process-SIT Fortaleza 2021.pdf

SAPInside Track
Fortaleza #SitFOR
1º
2º
Isabel Sánchez
SAP MM Consultant
www.linkedin.com/in/isabel-
sánchez-405812b4
Consignment Process in SAP (S/4HANA 2020)
Lecture:
FORTALEZA

Consignment Process in SAP
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ABOUT ME
• Currently working as an SAP MM consultant,within the DevOps team, for an automobilemanufacturer
company.
• Two certifications:Controlling(SAP ERP EhP7) and Finance (SAP S/4HANA 1809)
• Starting using SAP in 2015, and professionally as a trainer in 2018, in charge of training for SAP users within a
purchasing, logistics, contractingand economic-financesystem.
• Background: +15 years in Finance/Accountingdepartments
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AGENDA
INTRODUCTION
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CONSIGNMENT IN FIORI
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VENDOR CONSIGNMENT PROCESS IN SAP
2
CUSTOMER CONSIGNMENT PROCESS IN SAP
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INTRODUCTION
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Consignment is an arrangement in which goods are left in the possession of an authorized third party to sell.
To consign means to place goods or stock in the inventoryof another party but retainingownership until the products
are sold. Parties Involved in a consignment deal:
1. Consignor: An individualor party that brings a good to be sold on their behalf by another party, which is called the
consignee.
2. Consignee: A person who is designated as the receiver of goods. It is the individualthat buys or retains the goods
and passes them along to a third party or the final buyer. The consignee paysfor the goods only when they sell.
In this supply chain management strategy, the consignor retains legal ownershipof the merchandise, and the
consignee is not required to pay for the goods until after they have been sold.
What is consignment?
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PROCESSES:
Vendor Consignment
Customer Consignment

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How Does Consignment Work?
An item is placed in the care of a consignee until it’s purchased by a buyer. Until the item is sold, the owner
(consignor) is still responsible for anythingthat may happen to the item while it is in the care of the consignee.
CompanyA
Consignor
CompanyB
Consignee
Sends 100 units (01/01)
Buyer
Sells 95 units (during January)
Returns 5 units (01/02)
01/01: Consignor recognizes consignment inventoryfor 100.
During Jan: Consignee recognizes cash and liabilityto consignor (sold items) and commission income.
01/02: Consignor recognizes 95 ítems sold, COGS for 100 and the commission expense.
Consignee clears the liabilityto consignor.
Example:Consignor sends 100 ítems, with the agreement of selling them during the month of January. The consignee
sells 95 and on 1st Febr, returns 5 units. There is a commission of a % between them.
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VENDOR CONSIGNMENT
PROCESS IN SAP
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Consignment Process in SAP for a vendor is used when a vendor provides the company materialson loan.
The materials of the company are kept in the warehouse until you withdraw the said materials for processing. So then,
liability iscreated for the vendor and payment is done on agreed intervals, for example, weekly or monthly.
In this vendor consignment process, you first need to agree on the pricing with the vendor.
The prices are kept in consignment info records in the SAP system.
In that case, the prices can be automaticallycopied to purchase orders from info records in SAP System.
VENDOR CONSIGNMENT PROCESS (SAP MM)
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VENDOR CONSIGNMENT
SAP EASY ACCESS FIORI
Apps under Purchases
Apps under Inventory management
Data of Vendors – Apps under Accounts Receivable

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USE CASE FOR VENDOR CONSIGNMENTPROCESS
Vendor
Consignor
Own company
Consignee
Sends 10 units
10 units in consignment
Withdrawalof 5 units
Reversal of withdrawal and re-settlement.
Withdraws5 units
Companycode 0001
Vendor 130988
Material 750-STO test
Plant 3030
Purchasing organization 3030
Purchasing group 303
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PROCESS FLOW - STEPS
A) PURCHASING
B) INVENTORYMANAGEMENT
C) INVOICEVERIFICATION
Info record
Purchase order
Goods receipt of
consignment material
Consignment stock
Vendor
(Consignor)
Own company
(Consignee)
Receives purchase order
for consignment
material
Withdrawal
Liability
Delivers material
(without placing it in
invoice)
Settlement of
consignment liabilities
Receives credit
memo about
quantity withdrawn
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VENDOR CONSIGNMENT
PROCESS IN SAP
2
A) PURCHASING
Consignment Info record
Purchase order
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Creationof Consignment Info Record (ME11)
After filling the required
fields (Net Price is the
most important) and
clicking on Save
PURCHASING
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Creationof Purchase
Order (ME21N)
After filling the required
fields (header and item)
and clicking on Save
PURCHASING
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VENDOR CONSIGNMENT
PROCESS IN SAP
2
A) PURCHASING
B) INVENTORY MANAGEMENT
Goods receipt of consignment material / Effect in stock
Withdrawal(transfer Consignment goods to regular stock) / Effect in stock
Liability(Displaysettlement)
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INVENTORY MANAGEMENT
Goods receipt of Consignment material (MIGO/MIGO_GR: Mvmt type 101K): No financial postings are made in this point.
Enter storage location
Click OK to item
Clic check
Post
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Material Document List (MB51)
Accounting document → there is not accounting document
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DisplayConsignment stocks (MB54)
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Withdrawal:Transfer consignment stock to regular stock owned by the company(5 units).
Tcode: MIGO_TR
Mvtm type: 411 k
Example of transfer already filled.
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Stock overview after withdrawal (MMBE)
Stock overview after MIGO (MMBE)
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Liability(DisplaySettlement) - MRKO
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VENDOR CONSIGNMENT
PROCESS IN SAP
2
A) PURCHASING
C) INVOICE VERIFICATION
Settlement of consignment liabilities
What to do if there is a mistake?
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Settlement of consignment liabilities(MRKO): Moment when the invoice is created.
INVOICE VERIFICATION
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Financial documents (seen from Tcode
MB51-material document list)
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What to do in case of mistake?
There is not option to cancel the settlement.
The process is as follows:
• Reverse the withdrawal,mvmt type 411 K (MIGO).
• Settle againthe combination companycode, materialand supplier (MRKO).
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After a correction, there are different document numbers (seen in DisplaySettlemeny)
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Initialdocument number Reversal and settlement
Document numbers
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New material document list
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CONSIGNMENT FILL-UP
VIDEO 1 / DEMO
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Steps:
1. Create purchase order using ME21N
2. Post goods receipt of consignment material(MIGO/MIGO_GR)
3. Post Withdrawal(transfer Consignment goods to regular stock) (MIGO_TR)
4. Displaysettlement (MRKO)
5. Settlement of consignment liabilities

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VENDOR CONSIGNMENT
PROCESS IN SAP
2
A) PURCHASING
C) INVOICE VERIFICATION
ANNEX: CUSTOMIZING
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BEFORE THE PURCHASING: PRICING PROCEDURE
SPRO: MaterialsManagement/Purchasing/Conditions/DefinePrice Determination Process
STEPS TRANSACTION FUNCTIONALITY
1 Conditiontable M/04 Table where the system saves all the fields with combinationfor
individual conditionrecord.
2 Access sequence SPRO it searches conditionrecord for conditiontype from conditiontable.
3 Conditiontype M/06 Gross Price, discounts, etc.
4 Conditionrecord M/06 For combinationsconditiontypes/Access sequence.
5 Schema group OMFN Define Schema group for suppliers
Define Schema group for Purchasing organizations
Assign Schema group to Purchasing Organizations
6 Calculation schema SPRO ZSASIN, for this use case.
7 Schema determination OMFO Mappingof Schema group for Purchasing Organizations,Schema
group for suppliers and Calculation Schema.
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BEFORE THE PURCHASING: QUANTITY/VALUE UPDATE
Material must be valued based → material type (ROH) must admit value updatingin the valuation area(3030)
Tcode: OMS2
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Before creating the purchase order: Assignment
purchasing organizationto plant. Tcode: OMKI.
Maintain the tax information of the supplier (BP)/GL account (FS00).
OTHER CUSTOMIZING (1/2)
Before the settlement: Message control OMRM.
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Before the settlement (Finance posting/vendor invoice)
Tcode OB40 (automaticposts-account determination)
Tcode FTXP (tax codes)
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CUSTOMER CONSIGNMENT
PROCESS IN SAP
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In Consignment Process the products are stored at the customer location, but the owner of this product is still company.
Customer stores the consignment stock at their own warehouse. Customer can consume product from warehouse at any
time and customer billedfor product for quantityconsumes.
In Customer Consignment Process, there are four main steps within the SAP System, all of which support separate
management of stock:
1. Consignment Fill-Up (Stock Fill up at warehouse)
2. Consignment Issue (Stock issue from warehouse)
3. Consignment Return (Stock return from customer)
4. Consignment Pickup (Stock return to manufacture)
CUSTOMER CONSIGNMENT PROCESS (SAP SD)
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SAP EASY ACCESS FIORI
Apps under Sales
Outbound Delivery Creation-Processing
Apps under Sales - Billing
Data of customers – Apps under Accounts Payable

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Companycode 0001
Customer 60001100 - Test
Material 1988 – Test mat
Plant 9090
Sales Organization 2000
Distribution Channel 10
Division 00
Shippingpoint 0001
Storage location 9090
Customer
Consignee
Own company
Consignor
USE CASE FOR CUSTOMER CONSIGNMENT PROCESS
10 units
10 units for fill-up and issue
Customer returns 5 units due to damage in material
(Return and pick up)
5 units
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PROCESS FLOW
A) FILL UP
D) PICK UP
Fill up
Pick up
Unrestricted
stock
Own company
(Consignor)
Customer
(Consignee)
Consignment
stock B) ISSUE C) RETURN
Issued stock at
customer
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CUSTOMER CONSIGNMENT– SCREENSHOT SUMMARYFOR ANY STEP
1- Create sales order using VA01
3-Outbound Delivery using VL01N
2- Confirm quantitydeliveredVA02
4- Perform picking, packing and Goods issue using VL02N
Steps:
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PROCESS IN SAP
3
A) CONSIGNMENT FILL UP
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It is a process in which products are filling up at the customer site from company warehouse, but the owner of the
stock is the company itself.
In this step, you are not invoicing the customer. It will not be relevant for billing and pricing because you are not
charging money for these goods in this step.
CONSIGNMENT FILL-UP
Sales document type KB, movement type 631, item category KBN.
Effects: Customer consignment stock increases.
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CONSIGNMENT FILL-UP
Steps:
1. Create Consignment fill up using VA01
2. Confirm quantitydeliveredVA02
3. OutboundDelivery using VL01N
4. Perform picking, packing and Goods issue using VL02N
VIDEO 2 / DEMO
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PROCESS IN SAP
3
B) CONSIGNMENT ISSUE
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Once the customer informed you that he used all the goods or partialgoods then you will create consignment issue for
used goods.
The customer can sell or utilize the product at any time and companywill issue the invoicefor the used product. This
invoiceis calledas consignment issue. The following are the steps to perform consignment issue in SAP.
Here you are invoicing the customer (because he used the goods). you are assigning the delivery document and billing
document to the sales document.
In item category, you are setting relevant for billing,pricing, special stock.
CONSIGNMENT ISSUE
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Sales document type KE, movement type 633, item category KEN.

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CONSIGNMENT ISSUE
STEPS :
1. Create Consignment Issue (KE) using VA01
2. Confirm quantitydeliveredVA02
3. OutboundDelivery using VL01N
4. Goods issue using VL02N
5. Create Commercial invoice using VF01
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VIDEO 3 / DEMO

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Effects after consignment issue Accounting document
CONSIGNMENT ISSUE
Stock (MMBE): No changes. The same that after
Consignment fill-up.
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PROCESS IN SAP
3
C) CONSIGNMENT RETURN
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Customer found that some goods are damaged or because of not being able to sold the goods he wanted to send them
back.
You will assign delivery document and billingto sales document. You will create return order, return delivery, return
billing.
CONSIGNMENT RETURN
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Sales document type KR, movement type 634, item category KRN.

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CONSIGNMENT RETURN
STEPS:
1. Create Consignment Return (KR) using VA01 (Reason: Damaged in transit)
2. Confirm quantitydeliveredVA02.
3. OutboundDelivery using VL01N.
4. Perform picking, packing and Post Goods Receipt using VL02N.
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VIDEO 4 / DEMO

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Effects after Consignment Return
CONSIGNMENT RETURN
Stock Accounting document
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PROCESS IN SAP
3
D) CONSIGNMENT PICK UP
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When a customer requests the company to take back the damaged or poor-quality products, then the company will take
back the products from customer warehouse. Even if you create the consignment return the goods are not come directly
to your plant.For that you need to create consignment pick up.
The stock will increase.
Upon consignment pick up remainingstock from the customer consignment (W) will be posted back to unrestricted
stock.
CONSIGNMENT PICK UP
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Sales document type KA, movement type 632, item category KAN.

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CONSIGNMENT RETURN
STEPS:
• Create Consignment Pick Up (KA) using VA01
• Confirm quantitydelivered using VA02
• Outbound Delivery using VL01N
• Perform picking, packing and Post Goods Receipt using VL02N
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VIDEO 5 / DEMO

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Effects after consignment pick up
CONSIGNMENT PICK UP
There is not invoiceissued to
customer
Stock
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Sales Process Sales Document Type Item Category Movement Type Accounting Document
Consignment Fill Up KB KBN 631 No
Consignment Issue KE KEN 633 Yes
Consignment Return KR KRN 634 Yes
Consignment Pick Up KA KAN 632 No
SUMMARY
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MaterialDocument List (MB51)
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PROCESS IN SAP
3
D) CONSIGNMENT PICK UP
ANNEX: CUSTOMIZING 58
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BEFORE THE CUSTOMER CONSIGNMENT PROCESS: PRICING PROCEDURE
STEPS TRANSACTION FUNCTIONALITY
1 Conditiontable V/05 Table where the system saves all the fields with combinationfor
individual conditionrecord.
2 Access sequence V/07 it searches conditionrecord for conditiontype from conditiontable.
3 Conditiontype V/06 Gross Price, discounts, etc.
4 Assign Access Sequence
to Conditiontype
V/06 For combinationsconditiontypes/Access sequence.
5 Pricing procedure V/08 Create Pricing Procedure, assign conditiontypes to pricing
procedures (RVAA01)
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SPRO: Sales and Distribution/Basicfunctions/Pricing/Pricing control

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Combine distributions channels (OVAM)
Combine sales organizations (OVAO):
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Combine divisions(OVAN)
Assign permitted order types to sales area (OVAZ) – Do this for all the order types of the process
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VOPAN – maintainpartner determination
VK12 - Conditionsrecords (for customers)
MEK2- conditionsrecords (for suppliers)
OVL2 – shippingpoint determination
VOV4 – Assign item categories
ITEM CATEGORIES: Sales and Distribution -> Sales -> Sales Documents -> Sales Document Item -> Assign Item
categories
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OTHER T-CODES

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CONSIGNMENT IN FIORI
4
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VENDOR CONSIGNMENT CUSTOMER CONSIGNMENT
Apps under Sales
Outbound Delivery Creation-Processing
Apps under Sales - Billing
Data of customers – Apps under Accounts Payable
Apps under Purchases
Apps under Inventory management
Data of Vendors – Apps under Accounts Receivable

Sponsors
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https://www.linkedin.com/company/hvar-consulting/
https://www.linkedin.com/company/gfx-consultoria/
https://www.linkedin.com/company/dongkuksystemsbrasil/ https://www.linkedin.com/company/make-value-s-a/
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