Customer Consignment

Scenario Overview
Customer Click process
Return chevrons for details
Customer Consignment Consignment Management
Contract Fill-up Issue
Management Process Process
Cash and
Liquidity
Management

Consignment
Return
before
Invoicing

Consignment
Stock
Adjustments

Scenario Open Legend

Scenario Description
Explorer
The Customer Consignment business scenario enables you to sell products on consignment. You (consignor) can entrust a customer
(consignee) with the custody of your products (consignment stock), retaining their legal ownership until the customer uses or sells the
Scenario/Processes products. Once the customer uses the consignment products, you can then invoice them. The customer can return the products due to
various reasons either before or even after invoicing.
Customer Consignment includes the following process:
Business Value • Consignment Fill-up
• Consignment Issue
• Consignment Return Before Invoicing
Scenario Flow • Consignment Return After Invoicing (same as the standard customer return process)
• Consignment Stock Adjustments

The following business roles are involved in this scenario:

Customer
Warehouse Consignment
© © 2021 SAP AG. All rights reserved. Sales Agent Operator Manager Accountant
 Customer Consignment
Scenario Overview
Customer Click process
Return chevrons for details
Customer Consignment Consignment Management
Contract Fill-up Issue
Management Process Process
Cash and
Liquidity
Management

Consignment
Return
before
Invoicing

Consignment
Stock
Adjustments

Scenario Legend Open

CloseLegend
Legend
Scenario Description
Explorer
The Customer Consignment business scenario enables you to sell products on consignment. You (consignor) can entrust a customer
Process mainly driven by the user
(consignee) with the custody of your products (consignment stock), retaining their legal ownership until the customer uses or sells the
Scenario/Processes products. Once the customer uses the consignment products, you can then invoice them. The customerProcess can return the
mainly products
driven by thedue to
system
various reasons either before or even after invoicing.
Customer Consignment includes the following process: Process running in an external system
Business Value • Consignment Fill-up
• Consignment Issue Manual process not supported by the
• Consignment Return Before Invoicing system
Scenario Flow • Consignment Return After Invoicing (same as the standard customer return process)
Process that communicates with third-
• Consignment Stock Adjustments party software (mouse-over for details)

The following business roles are involved in this scenario: Process with relevance to Financials

Related scenario
Customer
Warehouse Consignment Warehouse
© © 2021 SAP AG. All rights reserved. Sales Agent Operator Manager Accountant Info button
Sales
Manager
<Role Agentwith more information
Name> Sales Agent
<Role Name>
 Customer Consignment
Process Details: Consignment Fill-up Process
Consignment Fill-up Process
X Click process
chevrons for details

Processing Consignment
Creating Inventory Financial
Outbound Issue
Sales Orders Posting Posting
Delivery Process

Consignment
Return before
Invoicing

Consignment
Stock
Adjustments

Scenario Process Description

Explorer The Consignment Fill-up process involves sending goods to the customer from your Performed by
company without the transfer of ownership. This process results in the reduction of stock at Sales Agent & Warehouse
your site and the increase of consignment stock. The goods remain in your ownership but Operator
Scenario/Processes these stocks are not considered in planning and execution as they are located at the
customer’s location (custodian).
In the Work Center(s)
Sales Orders
Business Value You can create a sales order with the fill-up items either with reference to a contract or simply Outbound Logistics
without a reference. Both consignment items and normal items can be added to the sales
order.
Scenario Flow
Consignment fill-up outbound deliveries work the same as outbound deliveries for standard
shipment or pre-delivery. The difference is that these consignment fill-up items are not relevant
for invoicing and the inventory is reduced from warehouse stock and increased to consignment
stock and custodian after the release of the outbound delivery. The ship-to-party information,
which is the location of the stock, is called the custodian.

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 Customer Consignment
Process Details: Consignment Issue Process
Consignment Issue Process
X Click process
chevrons for details
Process
Consignment Receivables,
Fill-up Payments,
Creating Inventory Financial Customer
Process Profitability
Sales Orders Posting Posting Invoicing
Analysis,
& Revenue Cash and
Recognition Liquidity
Management

Consignment
Return before
Invoicing

Consignment
Stock
Adjustments

Scenario
Process Description
Explorer
The Consignment Issue process involves removing the goods from the consignment stock
and transferring their ownership to the customer. The customer can then access the goods to Performed by
use or sell. You can record the transaction in the system to reduce the consignment stock and Sales Agent & Accountant
Scenario/Processes
then invoice the customer for the consignment stock consumed.

When you release a sales order with consignment issue items, results in a reduction of the In the Work Center(s)
Business Value
consignment stock for the custodian (customer). In the background an outbound delivery of Sales Orders
type Consignment Issue is immediately created and released. This will make to items ready Customer Invoicing
Scenario Flow for invoicing and invoicing can be performed as usual. General Leger
Cost and Revenue

© © 2021 SAP AG. All rights reserved.

 Customer Consignment
Process Details: Consignment Return before Invoicing
Click process
Consignment Consignment chevrons for details
Fill-up Issue
Process Process

Consignment Return before Invoicing

X
Consignment Financial
Inventory
Return Before Posting
Posting
Invoicing

Consignment
Stock
Adjustments

Scenario Process Description

Explorer
The consignment return process involves the return of consignment goods back to your
company. The customer can return the consignment stock without using them due to various Performed by
reasons such as defect in the goods or non-sale of stock. The process starts with a Customer Consignment
Scenario/Processes Custodian Return Notification for consignment goods. When the goods are received in the Manager
warehouse, the consignment stock is reduced and the warehouse stock is increased.
In the Work Center(s)
Business Value When the customer returns the goods after they are used or after consignment invoicing, the Inbound Logistics
process follows the usual customer return process.
Scenario Flow

© © 2021 SAP AG. All rights reserved.

 Customer Consignment
Process Details: Consignment Stock Adjustments
Click process
Consignment Consignment chevrons for details
Fill-up Issue
Process Process

Consignment
Return before
Invoicing

Consignment Stock Adjustments X

Create
Consignment Inventory Financial
Stock Posting Posting
Adjustment

Scenario Process Description

Explorer
The consignment stock can be adjusted to reflect the loss or gain of consignment stock
Performed by
arising due to scenarios like wrong quantities in the fill-up order, wrong issue notification, Customer Consignment
goods scrapped due to quality issues, or simply to align the consignment stock at the Manager
Scenario/Processes
customer’s location with the book quantity in the solution. As per the mutual agreement
between the consignor and the customer, the consignment stock is adjusted accordingly. In the Work Center(s)
Business Value Physical Inventory

Scenario Flow

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 Customer Consignment
Business Value

Initiate Manage Settle

Process
Receivables,
Create Create Sales Create Create Create Create Sales Create Payments,
Processing Create
Customer Order for Inventory & Custodian Consignment Order for Inventory & & Profitability
Outbound Reporting Customer
Contract Consignment Financial Goods Return Stock Consignment Financial Analysis, &
Delivery Invoice
(Optional) Fill-up Posting Notification Adjustment Issue Posting Revenue
Recognition

Scenario Overview Key Benefits

Explorer This scenario streamlines the entire
customer consignment process for mid- For the Consignor:
size companies.  Long-term contract to establish customer loyalty
Scenario/Processes  Material provision for trade or production consumption businesses
SAP Business ByDesign helps you
efficiently run the entire customer  Streamlined customer consignment process
Business Value consignment process from initiating the
 Immediate transparency in inventory location and ownership
consignment fill-up and delivery over
managing adjustments or returns,  Transparency in finance
Scenario Flow through to invoicing, and financial
 Financial Statements
settlement.

With customer consignment, you gain For the Customer:

transparency of the consignment stock
with respect to the inventory location and  It helps to reduce capital lock-up while having the immediate availability of goods
ownership. Furthermore, the
© © 2021 SAP AG. All rights reserved. transparency is also reflected in finance.
 Customer Consignment
Scenario Flow

Outbound
Sales
New Business Outbound NewSales
Business Outbound
Customer Receivables / Cash
Logistics Control
Orders Logistics Orders Logistics
Invoicing & Liquidity Mgt

Handling an Creating Handling Creating

Incoming Sales Processing an Incoming Sales Orders Creating
Consignment Orders for Outbound Consignment for Customer
Goods Consignmen Delivery Issue Consignment Invoices
Request t Fill-up Notification Issue Cash and
Liquidity
• Web • Web Management
service service
• Excel • Excel
upload upload

Inbound Logistics

Customer
Contract
Management Handling an
Incoming Processing
Custodian Inbound
Stock Return Delivery Inbound Logistics
Notification

Scenario • Web service

Explorer
Handling
Consignment
Stock Customer
Scenario/Processes Adjustments Return
Management
• Web service

Business Value

Scenario Flow
Legend & Variants

Dotted Dotted
line = line = Process related Work center in which
optional optional
Process • Process to Financials process is performed
Process
mainly mainly variant1 Work
driven by driven by • Process Center
the user the variant 2 Related Business
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