Consignment Inventory

Hi,
I'm trying to understand how Business One handles consignment inventory. I've searched SAP and none of the answers is very clear. I hear that it is necessary to set a warehouse up as a consignment warehouse. But the warehouse form does not show a consignment indicator. I heard that you should call it a drop ship warehouse. But this suggestion is neither consistent with the meaning of drop ship nor of consignment. Consignments and drop shipments are not the same. I am doing an add-on that needs to reconcile inventory counts; so I need to understand how Business One handles consignment.
Here is what I am seeing. The inventory tab for a serial number managed item says that there are 10 on hand. The serial number transaction report says that there are 11 serial numbers available. This is a difference of 1. The OITM table shows a field called u201Cconsigu201D, which means consignment. This field contains -1. Does this mean that one of the serial numbers is on consignment? The serial number transaction form says nothing about consignment. So there is no way of knowing which serial number is on consignment.
I ran an item balance restore at the suggestion of a co-worker and the number in the consig field changed to +1. But there are still 11 serial numbers available and a quantity on hand of 10. Is the consig field really a plug?
Any ideas?
Thanks,
Mike
Edited by: Mike Angelastro on Jan 26, 2010 3:16 PM
Edited by: Mike Angelastro on Jan 26, 2010 3:17 PM
Edited by: Mike Angelastro on Jan 26, 2010 3:19 PM

Hi Vijay,
In brief you have to use Misc Receipt and Misc Issue into a non asset Sub-Inventory for Consignment Items.
Then on a periodic basis run the Misc Issues report for figuring out usage and use it as an input for PO Receipts so that you can pay the Vendor for the Periodic usage. after doing PO receipt item is your asset and you may issue it to production or deal with it as per your needs.
This is the way I had done it , but not sure if this is the most effective way.This way we have to do 4 Transactions. If you get info on anyother approcah we discuss further and see how effective it is and hence we could use the one that is simpler from trx point of view
Thanks
Thiru
If you need more/specific help email me directly at [email protected]
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Edited by: Csaba Szommer on Oct 20, 2010 4:28 PM

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https://websmp106.sap-ag.de/~form/sapnet?_FRAME=CONTAINER&_HIER_KEY=701100035871000371280&_OBJECT=011000358700005050492004E&_SCENARIO=01100035870000000183&
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Hi
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Thanks for the quick response. I did maintain Purchasing info record using ME12. We do see pricing information at the time Production order backflsh. However contract and PO has no pricing information. Therefore initial GR is created with zero price. However at the time consumption against prod order, consignment material gets price from the Purchase info record. Bur consumption documents are not linked back to PO.When I try to cost these material using CK11N, SAP gives following messages,
Msg.typ Material Plnt Area MsgNo Message Text
I 1000 CK 037 Lot size 1 EA taken from costing view
I 1000 CK 776 No valid source of supply found for material plant 1000
E 1000 CK 465 No price could be determined for material/batch / plant 1000
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uday

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Consignment warehouse only has a accounting effect when the products is sold. so example of consignment warehouse will be like Honda selling it s cars through it s dealers..so if a dealer in new york sold one Honda car only then it will have an accounting and warehouse effect in it s headquarters in Detroit and Ny.
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Your understanding is correct.
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Drop Ship
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Inventory Transfers as Customer Consignments
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We are trying to set up Consignment stock functionality in our company. We have successfully configured and tested it but there is only one problem, we want to link this consignment functionality with and Outline agreement (Value Contract to be exact), so that every time we do a settlement using MRKO, the invoice value is deducted from the total value of the contract. My first question is
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Normally we do not get into consignment arrangements with supplier with value limites or qty limites. It defeats the purpose of consignment, where idea is to reduce inventory carrying cost and yet have full availability of stock.
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