SAP SD Consignments is a specialized process within the Sales and Distribution (SD) module that allows businesses to manage inventory that remains under the supplier’s ownership until it is consumed or sold. This unique sales approach helps reduce upfront costs for customers and enables better inventory management for suppliers. In a consignment process, goods are stored at the customer’s location, and they are only billed when used or sold. This Quick Guide provides an overview of how SAP manages consignment stock, outlines the key steps involved in the consignment process, and explains its benefits for both suppliers and customers.
SAP SD Consignments refers to those goods which are stored at the customer’s location but are owned by the business. The consignment quantity is monitored and controlled separately from the rest of the stock.
The customer pays only for those goods used or consumed from the consignment stock. The customer can usually return consignment goods which are not required. There are four main transactions for processing consignment stock –
- Consignment Fill-Up
- Consignment Issue
- Consignment Returns
- Consignment Pick-Up
Consignment Fill-up
When consignment stock is shipped to the customer, the transaction is referred to as consignment fill-up.
- In consignment fill-up, goods are delivered to the customer but they remain the property of the business.
The transaction is not relevant for pricing and billing. Hence no invoice is generated.
Consignment Issue
Consignment issue enables the customer to take consignment goods from the special stock for their use.
- The customer or the consignee may use the stock at his site and indicates the business of the same.
- The consignment stock that is used now becomes the property of the customer.
- The customer pays only for those quantity of goods consumed by him.
Consignment Fill-Up
Consignment Issue
Consignment Returns
Consignment Return involves the return of already issued consignment goods, by the customer, back to the consignment stock.
- The transaction is not relevant for billing as the returned stock was regarded as part of business inventory.
- The customer may then request for a credit note for returns.
Consignment Pick-Up
Consignment Sales
Interview Question on Consignments
Here are 10 interview questions related to the SAP SD Consignment process, covering Consignment Fill-Up, Consignment Issue, Consignment Returns, and Consignment Pick-Up:
- What is a Consignment Process in SAP SD, and how does it differ from a standard sales process?
- Explain the key features and advantages of consignment stock and its differences from traditional sales.
- Can you describe the steps involved in the Consignment Fill-Up process in SAP SD?
- Discuss the transaction used for filling up consignment stock (transaction code KB), and explain its purpose and flow.
- How does the Consignment Issue process work in SAP SD, and what document types are involved?
- Explain how consignment stock is sold or consumed, the transaction used, and how billing is triggered after the issue.
- What happens during a Consignment Return process in SAP SD?
- Discuss how to handle returns from a customer’s consignment stock, including the transaction code used (KE).
- What is the Consignment Pick-Up process in SAP SD, and when is it used?
- Describe how goods are picked up from the customer’s location when they are not sold or consumed, and how the system processes this scenario.
- Which transaction codes are used for Consignment Fill-Up and Consignment Issue in SAP SD?
- Identify the codes KB for fill-up and KE for issue, and explain their relevance in consignment stock handling.
- How are billing and inventory managed in the Consignment Issue process?
- Explain when the consignment stock is moved out of the customer location and how billing is triggered in SAP SD.
- Can a customer return consignment stock, and how is it managed in SAP SD?
- Discuss the steps and transactions involved in returning consignment goods from the customer to the supplier.
- What is the difference between Consignment Fill-Up and Consignment Pick-Up in SAP SD?
- Explain the purpose of both processes and when each is used during the consignment stock lifecycle.
- How does SAP SD ensure proper inventory tracking in the consignment process?
- Discuss how SAP tracks consignment stock in real-time, and which reports or functionalities help manage it efficiently.
These questions assess knowledge of the various consignment processes in SAP SD and their real-time applications.