Performing Consignment Transactions

You purchase consigned stock from suppliers using the Purchase Order - Form page. When creating a PO for a requisition, the Create Purchase Orders process uses the consignment options that you defined on the Define Business Unit Item - General: Common page to determine whether to mark the item as consigned.

See Defining PeopleSoft Inventory Business Unit Attributes.

The purchase order's consignment indicator on the Distribution Details page determines whether you can purchase the item as a consigned item. Use the following rules for setting and changing this option:

• If the item is consigned in the business unit and the supplier location on the PO is the assigned consignment supplier, the item is by default purchased as consigned.

  You can override this option and purchase the item as an owned item. You cannot purchase the item as non-owned.

• If the item is consigned in the business unit, but the supplier location on the PO is not the assigned consignment supplier, you can purchase the item only as owned.

• If the item is not consigned in the business unit, you cannot purchase it as a consigned item.

  You can purchase the item as either owned or non-owned, depending on its designation at the business-unit level.

To help suppliers ascertain which stock you are purchasing as owned and which you're purchasing as consigned, items marked as consigned on the PO are identified as such on the Purchase Orders Print report.

When consigned stock arrives at your warehouse, you receive it using the Receiving pages in PeopleSoft Purchasing. You can receive items with or without associated POs on the Receiving page. If you do not implement a separate inspection process, enter putaway information on the Inventory Putaway Information page. If you do inspections separately, record putaway information on the Inspection & Putaway Information page.

The consignment option that appears on the Inventory Putaway Information and Inspection Putaway Information pages indicates whether the item being received is consigned. If the receipt is associated with a PO, the default value comes from the distribution line and is for informational purposes only. If the receipt is not associated with a PO, you can use the Receipt Distributions page to override the setting before sending the transaction to PeopleSoft Inventory. The rules governing how this option is set and whether you can override it are the same as those described for the PO.

If you have defined storage locations on Purchasing Receiving pages, the locations offered as putaway options on the Inventory Putaway Information page, the Inspection Putaway Information page, and the Storage Location Search page vary depending on the item's ownership status:

• If the item is owned, only owned storage locations appear.

• If the item is consigned and the receipt is from the consigned supplier of the item, only non-owned storage locations appear.

• If the item is consigned and the receipts if from a supplier and supplier location that is not the consigned supplier of the item, only owned storage locations appear.

• If the item is non-owned and not consigned, both types of storage locations appear.

To complete the receiving procedure, transfer receipt information into the Inventory staging interface table (STAGED_INF_INV) by running the Receiver Interface Push process.

The setting of the consignment option on the PO (or on the receipt, if there is no PO) determines whether the Receiver Interface Push process inserts an item into the Inventory staging table as an owned, non-owned, or consigned item. If the item is consigned on the PO, it is staged for putaway as a consigned item. If the item is not consigned on the PO, it is staged for putaway as an owned item, unless it is designated as non-owned in the business unit where it is staged as a non-owned item.

After consigned items are staged for putaway, run the PeopleSoft Inventory putaway processes, including the Load Staged Items process (INPSSTGE), the Putaway Plan report, and the Complete Putaway process (INPPPTWY), to update the item and storage location quantities.

See the documentation for tables accessed and tables updated by PeopleSoft Inventory processes and reports on My Oracle Support.

For items to retain their consigned status, you must put them away into non-owned storage locations. Default putaway locations that have been set up for non-owned items can contain consigned stock.

You cannot put consigned items away using any of the PeopleSoft Inventory putaway pages; if you do, you must put the items into owned storage locations, in which case they are no longer designated as consigned. Consigned items that you put away using interunit transfers (including intercompany transfers) are considered consumed at the time of shipment and are classified as owned when received at the destination business unit. Returned materials (RMAs) are defined as owned or non-owned upon putaway, because their consumption was recorded during the original issue.

If you selected the Allow Transfers to Owned Loc (allow transfers to owned locations) option on the Inventory Definition - Business Unit Options page, you can move consigned items from non-owned to owned storage locations after putaway, where they are considered to be consumed and owned.

See Defining PeopleSoft Inventory Business Unit Attributes.

After items have been put away, the storage locations in which they reside determine whether they are still designated as consigned. Items in owned storage locations are always considered owned, no matter how they are defined at the business unit level. Items in non-owned locations are considered consigned if they are consigned in the business unit; otherwise, they are considered non-owned.

Consuming consigned items transfers ownership from the supplier to the business unit. When you conduct any of the consumption transactions in PeopleSoft Inventory or Manufacturing, the system recognizes the items as owned by the business unit and makes the consumption information available for costing and accounting.

Consumption transactions in PeopleSoft Inventory include:

• Transfers of consigned stock from non-owned to owned storage locations.

  You can make such transfers only if you selected the Allow Transfers to Owned Loc (allow transfers to owned locations) option on the Inventory Definition - Business Unit Options page.

• Shipping or express issues.

  You must run the Deplete On Hand Qty (Depletion) process (IN_FUL_DPL) after recording a shipment or express issue for the system to consider the stock consumed.

• Decrease or scrap transactions performed during ad hoc quantity adjustments.

• Stock quantity decreases performed for cycle counts or physical counts during the Stock Quantity Update process (INPOPOST).

  Consumption transactions in PeopleSoft Manufacturing include:

• Issues or returns of kit components.

• Record completions and scrap transactions.

• Work order issues (transaction group 230).

When you use consigned items, PeopleSoft makes the consumption information available to be costed and accounted for in PeopleSoft Cost Management. The Cost Accounting Creation process update the CM_DEPLETE and CM_ACTUAL_COST tables, providing the requisite data for creating the Consigned Inventory report and for building vouchers.

After you consume, cost, and generate accounting lines for consigned items, you create vouchers using the Voucher Build process (AP_VCHRBLD). The Consigned Voucher option that you select on the Procurement Options page determines whether vouchers are created automatically, staged as pending transactions, or created manually. If you specified manual creation, Voucher Build process does not create vouchers. In this case, you can send the Consigned Inventory Usage report to the supplier.

The business unit or the suppliers can drive the replenishment of consigned stock. If you choose business unit-managed replenishment, use the same ad hoc and reorder-point replenishment methods that you use for owned stock.

If you choose supplier-managed replenishment, you need to communicate the business unit's current inventory levels to each supplier on a regular basis. You can send these periodic stock inquiries using the Inventory Balance Notification integration point. This transaction extracts stock quantities (including quantity available, quantity reserved, quantity on hand, and quantity owned) from the BU_ITEMS_INV record for specified items in the business unit and relays this information to the supplier. The supplier then determines appropriate replenishment quantities.

To receive automatically replenished stock without creating a new PO for each receipt, you can:

• Use online receiving in PeopleSoft Purchasing without the POs option.

• Set up a PO that has been dispatched for the entire quantity of the contract.