- Definition: When company ship goods to customer designated location but haven’t transfer ownership to customer. The ownership only transferred to the customer after they use or sell them. Besides, customer will only pay the supplying company after they use or sell.
- Real-life Scenario: At the beginning of every month, Coka-Cola ship boxes of coke to Costco’s warehouse based on their sales forecast. Cosco helped Coka-Cola to sell their products in each stores. At the end of every month, Costco pay Coka-Cola based on how much cokes they sell within a month.
- SAP Process explained by scenario above: Sales order include 4 types
- Consignment Fill-up(KB): Created when Coka-Cola ship to Costco’s designated warehouse. Succeeding is delivery notes only as a shipping notice. After PGI the ownership still belongs to Coka-Cola.
- Consignment Issue(KE): Created when Costco reported back how much cokes they sell and as a preceding document before delivery notes and billing. After PGI the ownership transfer from Coka-Cola to Costco.
- Consignment Return(KR): Like normal return. It is created when end customer return coke to Costco.So the status is the same as when physical goods still in Costco before they are sold, the ownership is belong to Coka-Cola.
- Consignment Pick-up(KA): For example when Costco found out some coke with quality issue or the expire date is in the corner, they want to return to Coka-cola, a consignment pick-up order will be issued. The physical goods shipped back to Coka-Cola’s warehouse.
Others
- Stock Status :
Company is able to check how much of stocks are under their ownership but physically ship out to customers already by report in Tcode MB58
- Partner Function : SB (Special stock partner)
SB can be used in partner function, so that we can see how much stocks under different consignee location
