Customer Consignment Process

Customer Consignment is a form of business in which the vendor maintains a stock of materials at a customer’s location. The vendor retains ownership of the materials until they are withdrawn from the consignment stores. The customer is only charged for product once it is reported as used at which time it is deleted from inventory.

There are four standard SAP document types:

(KB) Consignment Fill-up:
Sends stock from storage to Customer Consignment.
(KA) Consignment Pick-up:
Returns stock from Consignment to Storage.
(KE) Consignment Issue:
Charges the customer and Removes from Consignment.
(KR) Consignment Returns:
Credits the customer and returns to Consignment

With a Consignment Fill-Up document (type KB), stock is physically sent to the customer (VA01 to vl02n) but no billing is done because the stock is still owned by the Vendor.
Once used, a Consignment Issue (KE) document type is processed with VA01 (and a “virtual” Delivery is processed) which removes the stock from Consignment stock and Bills the customer (VF01).
If a customer is billed for stock which was not really used, a Consignment Return (KR) is created with reference to the Issue (KE) which puts the materials back into Consignment stock and gives the customer credit.
If products that are in Consignment stock are found to be damaged or no longer needed then a Consignment Pick-up (KA) is created to move the stock from Consignment back to stock (no credit is issued because the customer was never billed).

What’s the difference between a Consignment and a standard Sales Order?

Sales Orders (and Returns) move product out of (and into) Inventory.
Consignment Fill-up and Pick-up move products but they remain in Inventory.

1 reply
  1. Suwandi says:

    Can we skip sales order registration when issue the stock from consignment ?
    Just like vendor consignment; don’t have to create PO, just move out the stock from consignment and we will be charged.

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