Considerations for the Create Consumption Advice Process
The Create Consumption Advice process consolidates consumption transactions over a period of time and groups them together to create the consumption advice.
The consumption advice is a report to the supplier that indicates that the consigned inventory has been consumed and that ownership has transferred from the supplier to the buyer. The consumption advice is created on a periodic basis agreed upon between the supplier and buyer and is used for billing purposes.
Important factors regarding a consumption advice include:
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Process parameters
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Communication methods
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Consumption advice summary
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Consumption advice generation frequency
Process Parameters
You can define the following parameters when setting up the Create Consumption Advice process:
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Supplier (optional): used to filter transactions for generating a consumption advice. If you don't specify a supplier, the application generates a consumption advice for all suppliers in the organizations that have ownership changes.
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Supplier Site (optional): used to further filter transactions for generating a consumption advice. If you specify a supplier site, you must also select a supplier.
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Include Transaction Type: you can group consumption advice by transaction type.
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Display Lot and Serial Number: specify whether or not to include lot and serial number details on the consumption advice.
Communication Methods
There are several different methods to communicate the consumption advice to the supplier. Communication methods include:
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Print
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Fax
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Email
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Publish to Supplier Portal
Consumption Advice Summary
You can produce a consumption advice at different summary levels. For example, you may want to produce a single consumption advice for each organization and item. The consumption advice summary option is carried on the consignment agreement. The Create Consumption Advice process uses this value to determine how to generate the consumption advice. The consumption advice summary options include:
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A single consumption advice for inventory organization, item, and transaction date.
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A single consumption advice for inventory organization and item.
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A single consumption advice for inventory organization.
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A single consumption advice for all inventory organizations.
Consumption Advice Generation Frequency
For consigned inventory, the buyer and supplier agree upon a consumption advice generation frequency.
The consumption advice generation frequency indicates the frequency at which the Create Consumption Advice process runs to consolidate consumption transactions for a defined period of time. When the Create Consumption Advice process is run, the application generates a consumption advice which sends consigned inventory transaction information from the buyer to the supplier.
The consumption advice generation frequency is determined by adding the consumption advice frequency (Daily, Weekly, or Monthly) to the closing date of the billing cycle.