365 FO
In this post we are going to review consignment scenario where vendor sends
the inventory to the company but vendor retains ownership until the
consumption. It could be production consumption or sale. Once the company
received the goods, it will be stored in companies’ site or warehouse. Later on,
the company can take the ownership of the item once the item is ready to be
consumed on a production order/sale. Until changing the ownership, item is still
owned by vendor.
The general idea is in using of the tracking dimension “Owner”. This tracking
option gives the visibility who owns what. Using this tracking dimension, you can
easily identify where is vendor-owned inventory and where is company-owned
inventory. In this process a new type of orders is represented. It’s
called Consignment replenishment order which track incoming vendor-owned
inventory. In addition to that inventory ownership change journal enables
automatic generation of the purchase order product receipt which will constitute
grounds for invoice and payments.
There is basic setup that needs to be completed for using inventory consignment
capability.
Inventory owners.
Navigate to Inventory management > Setup > Dimensions > Inventory owners.
Add the vendor who becomes consignment vendor.
1. Product creation
Navigate to Product and information management > Products > Released
products
Click New button.
Select Owner tracking dimension group.
Populate the rest of the fields.
*** Keep in mind that Owner tracking dimension could be assigned to the
products which have Standard cost or Moving average products.
Check the transactions. You will notice that status has been changed to
Purchased.
That’s it!