Work with consignment inventory
Consignment inventory is inventory that’s owned by a vendor and stored at your site. When you’re ready to consume or use the inventory, you take over the ownership of it.
Consignment replenishment orders
A consignment replenishment order is a document that you can use to request and keep track of inventory quantities of products that a vendor intends to deliver within a certain date interval by creating ordered inventory transactions.
Typically, this will be based on the forecast and actual demand of the specific products. The inventory that’s going to be received against the consignment replenishment order remains in the ownership of the vendor. Only the possession of the products that are related to the physical receipt update is recorded; therefore, no general ledger transaction updates occur.
The Owner dimension is used to separate information about which inventory is owned by the vendor and which is owned by the receiving legal entity.
Consignment replenishment order lines have an Open order status if the full quantity of the lines has not been received or canceled. When the full quantity has been received or canceled, the status is changed to Completed.
The physical on-hand inventory that’s related to a consignment replenishment order can be recorded by using either a registration process or a product receipt update process. Registration can be done as part of the item arrival process or by manually updating the order lines.
When the product receipt update process is used, a record is made in the Product receipt journal, which can be used to acknowledge the receipt of goods to the vendors.
Inventory ownership change journal
The process of changing the owner of the inventory from the vendor to the receiving legal entity is done by using an Inventory ownership change journal. No expected inventory transactions are created for the journal. The only inventory transactions created are those that relate to a posted journal.
When the journal is posted:
- The vendor-owned inventory is issued by using an Ownership change reference with a Sold status.
- On-hand inventory is received by the legal entity that’s consuming it by using a product receipt updated inventory transaction on the purchase order. This sets the status of the order to Received. Purchase orders that are used for consignment have the Origin field set to Consignment.
- It’s not possible to update the quantity on consignment purchase order lines after the order has been created.
Vendor collaboration in consignment processes
If your vendors are using the vendor collaboration interface of Supply Chain Management, they can use this to monitor the consumption of inventory at your site.
The vendor collaboration interface has three pages that are related to the inbound consignment process:
- Purchase orders consuming consignment inventory - Shows detailed purchase order information that is related to the ownership change from the consignment process.
- Products received from consignment inventory - Shows information about the items and quantities that have product receipts updated during the ownership change process.
- On-hand consignment inventory - Shows information about the consignment items that they are expected to deliver and the items that are already physically available at the customer site.
For more information about vendor collaboration, see Configure and manage vendor collaboration in Dynamics 365 Supply Chain Management.
Tracking dimension group
Items that are going to be used in consignment processes must be associated with a Tracking dimension group where the Owner dimension is set to Active. The Owner dimension always has the Physical inventory and Financial inventory options selected. The Coverage plan by dimension option is never selected.