Consigned Inventory in Oracle Applications Setup & Process

Consigned Inventory is an inventory which is in possession of Customer but the items lies in it is owned by Supplier.

To perform this concept in Oracle Apps, following setups required.

Make new item for consigned inventory, item template is Purchased Item and tick on Use Approved Supplier in Purchasing tab, also enable Consigned Check box in General Planning Tab.  

 

 And then save it and assign the item to organization.

Now we need two subinventories, one for Asset sub inventory which is in possession of Customer and one for Expense in which supplier puts item. Expense subinventory will be placed in Customer Premises but possession of that subinventory will be to Supplier.

For creating subinventory go to Inventory > Setup > Organizations > Subinventories

And then create new subinventory (Asset subinventory).

 

 

Now define Expense subinventory 

 

At supplier site, we need to setup in self billing section. 

Navigation: Purchasing > Supply Base > Suppliers 

Set Pay On = ‘Use’ and Invoice Summary Level = ‘Pay Site’

  

After doing setup at supplier level we need to create Blanket Purchase Order between Supplier and Customer.

Navigation: Purchasing > Purchase Order > Purchase Orders

 

 Then it will go for Approval. 

 

After creating BPA, Define consumption transaction rules and selected transfer type as Subinventory Transfer, given weight as 10, Entered Owning Party details, Entered from & To Sub inventory details and item details.

Navigation: Inventory > Setup > Consigned/VMI Consumption

 

 

In Approved Supplier List, we need to setup for ‘con_01’ for Supplier ‘Manual Supp01’

Navigation: Purchasing > Supply Base > Approved Supplier List

 

 

 Now go to attributes, Source Document Tab

 

At inventory tab, tick on Consigned from Supplier 

 

Now all setup regarding Consigned Inventory has been done. 

Process: create Standard PO for same supplier and item.

  

Go to shipments tab,

 

Here consigned tab is checked.

Submit for approval that PO.

 

Now receipt the ordered item

 

Receive the items, receive items at CON_EXPENS subinventory.

 

Now items are received and in the CON_EXPENS subinventory which is Expense subinventory, under the possession of Supplier.

Created Consigned Transaction and Selected Transaction Type as “Transfer to Regular “.

Go to Inventory > Transactions > Consigned Transactions

 

 

Perform the transaction And save it.

Now, Run the concurrent “create consumption advice”

Run the concurrent Pay on Receipt Auto Invoice with a transaction source of “ERS_AND_USE” for our inventory receipt number.