Make Your Customers’ Stock Readily Available With Modified Customer Consignment

  • by Gaetano Altavilla, Senior SAP Practice Manager
  • October 8, 2009
If you are storing your customer’s goods on your own site, see how you can ensure that your customer’s stock is available at any time.
Key Concept

In customer consignment, a company has allowed its customer to reserve stock in the company’s warehouse. The goods have already been paid for and are considered to be the customer’s property. The company must then be able to provide the goods to the customer as soon as the customer needs them.

A client I once helped had a customer that, due to the lack of space in its own warehouse, stored its goods in the client’s warehouse. One day the customer decided that, based on its marketing activities, it needed to discontinue an old item to make space for a newer item. In order to sell the old item quickly, the customer needed to ensure its products’ availability at any time of the day.

My client was worried. It wasn’t sure it could handle such random orders. Fortunately, it could and so can you. The way to handle this situation is actually quite simple. To fulfill your customer’s requirement, I suggest implementing a solution that incorporates customer consignment and billing before issuing. Customer consignment segregates the customer’s stock from the company’s stock, and the billing before issuing allows the customer to pay you for the stock before it sells it to other customers.

I will describe how you first invoice the customer and compare my process to the standard customer consignment process. Then, I’ll walk you through the process before describing the required customization in detail. My scenario is based on an implementation I did for a client using the customer consignment elements implemented for sales and distribution (SD) and shipping in SAP ERP Central Component (SAP ECC) 6.0. However, the process also applies to previous SAP ERP releases.

Gaetano Altavilla

Dr. Gaetano Altavilla is a senior SAP practice manager. His focus is on pre-sales, delivery of SAP application solutions for large international corporations, and SAP knowledge management in Europe, the Middle East, and Africa (EMEA).

In his 18 years of SAP application experience working for many multinational companies, such as Procter & Gamble and Hewlett-Packard, he has covered a wide range of ERP logistic areas, focusing on the MM, WM, SD, LES, PP, PP-PI, PLM (QM, PM, PS) modules, as welll as CRM (TFM), SRM (EBP), SCM (SAP APO), and MES (ME) components.

Dr. Altavilla holds a degree with first-class honors in mathematics from the University of Naples and is certified in many SAP modules: SAP Logistics Bootcamp, SAP MM, SD, LE (SHP/WM/LE), PP, PLM (PM, QM, PS), SRM, CRM, SCM (APO), SCM (TM), FI, CO, and Solution Manager. He also has experience in ABAP/4 and application link enabling (ALE) and IDocs. He has participated in numerous industry conferences, such as the SAP Skills Conference in Walldorf at SAP SE.

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