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E1: 42I: Outbound Inventory Management for Consigned Inventory (WIP) (Doc ID 2194927.1)

Last updated on OCTOBER 31, 2018

Consigned Inventory Management is a supply chain management strategy in which supplier places some of their inventory in their customer's possession (in customer's store or warehouse) without billing the customer until after the goods are consumed. After customer reports usage, supplier invoices the customer for the consumed goods.

Note: The Outbound Inventory Management solution supports the sell side (supplier side) of the business to track and manage inventory shipped outbound to customers' locations and hence the name Outbound Inventory Management.

The following are the steps that are commonly observed in consigned inventory business:

  1. Supplier and customer establish an agreement for shipping and maintaining inventory at the customer’s location. The agreement dictates the terms like agreement qty, agreed price, agreed inventory levels to be maintained at customer’s location, when and how to replenish the inventory at customer's location.
  2. Supplier ships inventory to the customer’s location.
  3. Customer acknowledges receipt of the inventory.
  4. Customer consumes the inventory and reports the consumption to the supplier.
  5. Supplier invoices the customer for the consumption reported.
  6. If agreed, Supplier replenishes the inventory at the customer’s location based on the agreed inventory levels and the replenishment method.

This document provides details on Outbound Inventory Management for Consigned Inventory including an Overview, Setup, Consigned Agreement Management, Consigned Shipping Line Process Flow, Consigned Billing Line Process Flow and frequently asked questions.

 

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