Definition

The scenario of consignment procurement covers the flow of sequential processes of providing goods by the vendor to the company on consignment terms.

In this scenario, the vendor provides materials and stores them in the company's warehouse. Goods are provided mainly for resale purposes. Before its use by the company, the goods belong to the vendor.

In rare cases, this consignment procurement scenario is used for the consumption be the company for internal needs (e.g. manufacturing). In this case, the consignment procurement scenario is a similar to the S2P Procurement via vendor managed inventory scenario. All goods consumed by the company need to be redeemed, and futher invoice issue need to be initiated.

The consignment contract usually defined the terms of regular notification about the sale of goods, goods consumption and identified goods shortages.

The compnay performs regular monitors of the consignment goods level and sales statistics to initiate the follow-up actions on time: