SAP Consignment Cycle

A form of business in which a vendor (external supplier) maintains a stock of materials at a customer (purchaser) site.
 
The vendor retains ownership of the materials until they are withdrawn from the consignment stores.
 
Payment for consignment stock is required only when the material is withdrawn for use. For this reason, the vendor is informed of withdrawals of consignment stock on a regular basis

Consignment is a type of procurement process. In this process, the vendor makes material available, which you then manage as consignment stock. A liability only arises when material is withdrawn from consignment stock, not when the stock is placed in the consignment stores.
 
1. Material Master record and Vendor should be there.
 
2. Info record with procurement type consignment should be there.
 
3. You have to activate the consignment price via info record in SPRO -> Materials Management -> General settings for materials management --> Activate Consignment Prices via Info Records

4. Here you have to remember that, while placing PO, the price will be zero and the price will be picked from inforecord. and PO should be with Item Category "K" consginment
 
5. Vendor will supply the goods as per the PO and our company will receive the goods. After receiving the goods the same will be lying in your company premises, but not belongs to your inventory. It can be used only after posting to inventory or consuming directly.  But will pay for the goods as & when we are consuming/posted to inventory to the company.    
 
6. The payment will be made thru MRKO settlements. We can also set for automatic payments thru batch jobs.