What is consignment in SAP SRD-SRM - SRM-Supplier Relationship Management?

SAP Term: consignment

• Component: SRD-SRM

• Component Name: SRM-Supplier Relationship Management

• Description: A method of business in which a supplier maintains a stock of products at a buyer’s site. The supplier retains ownership of the products until they are withdrawn from the consignment storage location. Payment for consignment stock is required only when the products are withdrawn for use.

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• Key Concepts: 
  Consignment is a type of inventory management in SAP SRM (Supplier Relationship Management) that allows a company to store goods at a supplier’s location without having to pay for them until they are used. This type of inventory management is beneficial for companies that need to keep large amounts of inventory on hand but don’t want to pay for it until it is used.
  
  How to use it: 
  In SAP SRM, consignment can be set up by creating a consignment agreement between the company and the supplier. This agreement outlines the terms and conditions of the consignment, such as the amount of inventory that can be stored, the payment terms, and any other relevant information. Once the agreement is in place, the company can then store its inventory at the supplier’s location without having to pay for it until it is used.
  
  Tips & Tricks: 
  When setting up a consignment agreement, it is important to ensure that all parties involved understand the terms and conditions of the agreement. It is also important to ensure that all parties are aware of any changes or updates to the agreement. Additionally, it is important to keep track of all inventory stored at the supplier’s location in order to ensure that payments are made on time and in full.
  
  Related Information: 
  For more information on consignment in SAP SRM, please refer to SAP’s official documentation on consignment agreements. Additionally, there are many online resources available that provide helpful tips and tricks for setting up and managing consignment agreements in SAP SRM.