PAYAL CHATTERJEE
SAP MM CONSULTANT
Payalchatterjee777@gmail.com
CONSIGNMENT PROCESS IN SAP MM
𝗪𝗵𝗮𝘁 𝗶𝘀 𝗖𝗼𝗻𝘀𝗶𝗴𝗻𝗺𝗲𝗻𝘁
Consignment is nothing but vendor maintain stock of material in company
premises. Liability of stock remains with vendor unless and until it is
removed from consignment stock and posted to warehouse stock, its is
the same process of creating normal PO but item category is “K”.
Benefits of Consignment Orders
• Cost Efficiency: Payment is made only when the goods are consumed.
• Improved Cash Flow: Helps maintain a positive cash flow by delaying
payments.
• Reduced Inventory Costs: Lowers inventory carrying costs since the
supplier retains ownership until use.
• Better Inventory Management: Ensures availability of materials without
immediate capital expenditure.
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PAYAL CHATTERJEE
SAP MM CONSULTANT
Payalchatterjee777@gmail.com
Consignment Process Flow: -
ME21N MIGO MIGO MRKO
Goods Receipt Consumption Settlement
Po
Invoice & Payment
Stock transferred from Vendor to Consignment Store (Transfer Posting).
Pre-Requisites-
• Purchase Info Record is mandatory
• Item category in Purchase Order should be ‘K’
• Goods Receipt
• Transfer Posting from Consignment store to Plant stock with ‘411K’
• No MIRO (Invoice Receipt)
• MRKO for settlement to the Vendor
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PAYAL CHATTERJEE
SAP MM CONSULTANT
Payalchatterjee777@gmail.com
Steps to create Consignment Process: -
1) Create Material master MM01
2) Create Vendor master XK01
3) Create Purchase Info Record (PIR)
ME11 with info category as “K”
4) Create Purchase Order ME21N with
item category as “K”
5) Goods Receipt MIGO with Mvt 101K
6) Check Stock overview MMBE
7) Goods issue by Transfer posting wrt PO
with Mvt 411K or 201K by cost center
8) MRKO settlement to the Vendor.
(invoice verification)
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PAYAL CHATTERJEE
SAP MM CONSULTANT
Payalchatterjee777@gmail.com
Following are the steps for Consignment-
Step 1-
• Created a Material by T code--MM01
Material 60080788 created
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PAYAL CHATTERJEE
SAP MM CONSULTANT
Payalchatterjee777@gmail.com
Step 2-
• Created a Vendor by T code --XK01
Vendor created – 2200000045
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PAYAL CHATTERJEE
SAP MM CONSULTANT
Payalchatterjee777@gmail.com
Step 3-
• Created PIR by T code-- ME11.
• Select Info Category as Consignment.
• Mention Tax Code with Net Price as it is Mandatory for Consignment Process.
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PAYAL CHATTERJEE
SAP MM CONSULTANT
Payalchatterjee777@gmail.com
• PIR created 6000000298
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PAYAL CHATTERJEE
SAP MM CONSULTANT
Payalchatterjee777@gmail.com
Step 4 –
• Created Purchase Order by T code—ME21N.
• Select Item Category as ‘K’ for Consignment.
• No Conditions Tab will appear in Item Details of the PO as settlement of
payment will be done through MRKO.
• po created 4500025071
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PAYAL CHATTERJEE
SAP MM CONSULTANT
Payalchatterjee777@gmail.com
Step 5 –
• Created Goods Receipts -- MIGO.
• Movement Type –101.
Material Document posted -9200000315
• No Accounting entries can be found after Goods Receipt.
• Accounting Entries will be generated after it gets Consumed.
www.linkedin.com/in/payalchatterjee05
PAYAL CHATTERJEE
SAP MM CONSULTANT
Payalchatterjee777@gmail.com
Step 6 –
• We will check the stock of Material by T code ‘MMBE’.
• As it is Consignment it will show under Vendor Consignment
Stock.
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PAYAL CHATTERJEE
SAP MM CONSULTANT
Payalchatterjee777@gmail.com
Step 7 –
• We will do the ‘Transfer Posting’ in MIGO
• Transfer Material from Vendor Consignment Stock to Plant Store Location.
• In MIGO we will do transfer posting with the Movement Type – 411K.
• Mention Material number, Plant and Storage Location.
www.linkedin.com/in/payalchatterjee05
PAYAL CHATTERJEE
SAP MM CONSULTANT
Payalchatterjee777@gmail.com
Material document 491934 posted
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PAYAL CHATTERJEE
SAP MM CONSULTANT
Payalchatterjee777@gmail.com
Step 8 –
• We will again check the stock of Material by T code ‘MMBE’
• Stock will be transferred from Vendor Consignment store to Plant
Storage Location
Step 9 –
MRKO (Market Risk Operations): Settlement to the Vendor: -
In The First Step We Will Select ‘Display’ Under Processing-
• For settlement of the payment to Vendor we use MRKO as we
have received the material through Vendor Consignment.
• Mention Company Code, Vendor, Plant
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PAYAL CHATTERJEE
SAP MM CONSULTANT
Payalchatterjee777@gmail.com
• Under selection, select Consignment button
• Under Processing, select Display button
• Execute
Check all the Details displayed in the MRKO page.
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PAYAL CHATTERJEE
SAP MM CONSULTANT
Payalchatterjee777@gmail.com
In Second Step We Will Change the Processing To ‘Settle’
• Return to MRKO page and mention Company Code, Vendor, Plant
and Material Number
• Under Selection, select Consignment button
• Under Processing, select Settle button
• Execute
• Payment has been settled Document created.
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PAYAL CHATTERJEE
SAP MM CONSULTANT
Payalchatterjee777@gmail.com
• We can check the Accounting Entries by clicking on the Document
Number-
• KON (-) =Consignment Store
• BSX (+) =Own Store (From Consignment store to Plant store)
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