Consignment Process


1. Client creates a consignment order for their distributor.

2. The consignment stock sits at the distributor location. The distributor sells some of this stock to end customer.

3. Client creates an issue order for this quantity, this order has end customer as the ship to as well as bill to parties.

4. When the goods are delivered against this order, the consignment stock is reduced.

5. Client then creates an invoice for the end customer.

SAP Solution

1. Create Cosignment fill up order of type KB with distributor as sold-to, ship-to and bill-to and payer.

2. Create delivery for this order and do PGI, which shifts this stock to ‘customer consignment stock” (special stock w).

3. Assumption – the master data for the end customer exists in the system and has all mandatory partner functions defined.

4. Create a consignment issue order of type KE, which has sold-to as the distributor and ship-to, bill-to as the end customer.

5. Create delivery and do the PGI, which reduces the consignment stock.

6. Create invoice, which has the end customer as bill-to and the distributor as ‘payer’.


4 thoughts on “Consignment Process

  1. Ranga

    Query on FICO Implications regarding consignment.

    1) Will the target cost that is calculated on a Sale order item posted to COPA ( Profitability Analysis ) when the Invoice in SD is released to Finance.

    2) Will it post FI Documents at the time of delivery and PGI after the step Consignment issue order.

  2. Adi

    Could we do cross company consignment?
    That means that we create KE fill up order, than the delivery, while the ship to is a cutomer which related to other company in our organisation.

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