Training by Studyuuu for SAP MM

Training by Studyuuu for SAP MM
Training by Studyuuu for SAP MM

Thursday, 1 August 2019

Consignment Procurement and Pipeline process in SAP MM



Consignment and Pipeline process in SAP MM



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Consignment:

Consignment is a process of material procurement from the vendor, but stock lies in plant premises, but owner of the product is vendor, even its same process of creating normal PO but item category is K.


Concept:

Normally we use to purchase the stock from vendor, in this case we will purchase the stock, but we don’t know when we will use that stock for the production. So, for that we have SAP recommended procurement process-Consignment, where stock keep in the plant and there is premises for vendor -we can call as vendor consignment stock, whatever the stock present in plant the owner will be vendor and when we require any stock then we can move that stock from vendor consignment stock to production stock and we will post MRKO instead of MIRO, so that report will be generated for the transfer stock and vendor will get paid for that.

If we withdrawal any stock from vendor consignment stock like 5 PC, then MRKO will be done with 5 quantity and vendor will get paid for 5 PC.

The refilling process will be done by creating a PO with account assignment K for only filling the gap stock.

PIR:

If we are creating consignment PO, then few mandatory things are PIR. Where price and tax code will be calculated from PIR itself, because we don’t have price in PO.

The reason we don’t have price in PO is -Price will get fluctuate every month and stock lying with us we will use, and we don’t know when we will use that stock.

Every month price will be given by the vendor for the material and purchasing team will update the price in PIR and when the stakeholders do MRKO, the price will be picked from PIR for that month.

One mandatory thing is PIR should be created to subcategory Consignment.
Process:

Create a material, vendor and PIR-mandatory and create a PR with this thing with item category K-consignment.

Once we create PO for the above PR, the stock in MMBE shown as In-order Consignment stock.
Then once you receive the goods to plant then do the MIGO for full quantity.

Now check the stock for the material and plant in MMBE, it will show as stock lying with vendor as vendor consignment stock.

When you do MIGO, the movement type will be taken automatically 101-K, where it’s a consignment.

Here coming to accounting data- there is material document created but there is no FI document posted.

Now as per your requirements we need to transfer the goods from vendor consignment stock to our own stock by movement type 411-K

Now will stock will be lying in unrestricted stock

If we do transfer for 5 PC then we need to do MRKO for 5 PC, so that Invoice will be posted automatically for 5 PC and vendor will get paid for 5 PC.

Whenever we do stock transfer from vendor consignment stock, we need to do MRKO.

If we want to move from vendor consignment stock to direct production/cost center and department, then we need to know their cost center so that we can transfer goods directly from vendor 

consignment stock to cost center by movement type 201 K or 261 K

While moving vendor consignment stock to direct production/cost center and department a material document as well financial document has been created with BSX and WRX.

Whenever there is financial document is created then GL account will hit for debit of their respective cost center GL account.

We can do initial posting of goods to any plant by T-code MB1A -561 movement type, normally we will do this when client is using different ERP and transferring to SAP.

Same as above we have MB1B for the goods movement from 1 place to other

We have MB1C for Goods issue, we can also have goods receipt without PO and for also free goods.

Running cycle for Consignment:

Let think now we have a requirement for some materials, but we don’t know when we use these materials fully, in that case requester has been ordered for Consignment -Created a consignment PR 1164 with 100 PC.

Now the purchasing team will create a PO 2264 for the PR 1164, few of the mandatory things are PIR with subcategory K -quantity 100 PC.

Once we create PO, the stock will show in MMBE-Consignment stock for that plant as 100 PC
Once we receive the material to plant the respective receiver will post the GR in MIGO-sating material has been received to plant and placed in consignment stock (Posting MIGO for full quantity-100 PC).

Now the stock will show in vendor stock in MMBE as 100 PC

Now check for FI postings- because vendor has been delivered goods to plant- in normal case a Material doc and FI doc will be created automatically.

In this case, we have only material stock gets posted, and FI doc will not be created because it’s a consignment- stock lying in vendor consignment stock.

Process has been completed for procurement, now the actual process will come into picture.
The purpose we ordered material is for production requirements, now the stock is in vendor consignment stock and we need to use for own purpose or industry purpose.

In this case, we need to use “Goods transfer” from one stock to other stock with the help of movement types.

We have already stock in vendor consignment stock in our plant, so just we need to move to our own stock by using movement type 541(vendor consignment stock to own stock)

We can also use 201 K and 261 K for directly move the stock from vendor consignment stock to cost center which are using those goods.

Once we do the goods transfer the stock will get moved to plant own stock, once we do this a material document has been posted along with that there is a financial document has been posted(because we are using vendor consignment stock and we need to pay to the vendor).
Just think we have moved only 10 PC instead of 100 PC.

Now we need to do the MRKO process, where we need to mention the material and plant the select the settle option which are not settled.

Once we do the MRKO for 10 PC, then APAY will run the cycle and match the reconciliation quantity and vendor gets paid for 10 PC.

Whenever we use the quantity from vendor stock, we need to do MRKO, so that vendor will get paid.

Why MRKO and Why not MIRO?

Because in MIRO, you cannot post the split price. We need to do full invoice.
Whereas in MRKO, we can do split invoice.

Pipeline Procurement:

Pipeline procurement is the process where, material will be flowing from the vendor premises to plant premises, and there is no material is listed in inventory and we cannot measure the stock anywhere in MMBE or other T-codes because its flow like petrol, current and coming to payment its similar to consignment.

There is no PR and PO required for pipeline.

But PIR is mandatory for Pipeline material and while creating material master we need to select the material type as Pipeline material.

Update the PIR price and tax code or else we can receive an error in MRKO posting

Coming to enterprise structure – Standard purchase organization must be linked to this plant, because we are doing special procurement and always for special procurement plants, it must be linked to standard purchase organization.

Process:

Whenever we require any quantity from pipeline and process the MRKO, just we need to release the quantity and coming to power usage, we need to maintain MRKO on monthly basis as used power watts and vendor gets paid for that.

We can take the goods directly in plant and coming to SAP we have movement type 201 P and 261 P to maintain the goods issue.

Once goods issue is done as per the usage, we need to post the MRKO as settled for unsettled usage.

Few Important points to be noted:

Tax code in PIR will be defined by SAP FI consultant, and if we require then raise a ticket for them and get the tax code and assign in PIR.

We will not do MIRO for consignment and pipeline and instead of that we use MRKO, where backend FI document has been created for the payment purpose.

Once the invoice is posted in normal PO’s then we need to do credit note only if any issues found and after cancel the GR and repost.

Any extra pay for vendor we needs to use the subsequent credit to vendor and directly we cannot maintain in MIRO.


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8 comments:

  1. Sir it's too much helpful. You explained all concept in easy language. Thanku. Sir plz post blog on pricing procedure

    ReplyDelete
    Replies
    1. Thank you Pratiba
      Pricing proceadure concept is posted, please check the blog concepts Month wise
      you will find the concepts you requeste

      Delete
  2. Sir it's too much helpful. You explained all concept in easy language. Thanku. Sir plz post blog on pricing procedure

    ReplyDelete
    Replies
    1. Thank you Pratiba
      Pricing proceadure concept is posted, please check the blog concepts Month wise
      you will find the concepts you requested.

      Delete
  3. Hi ram, without po and pr how we will do mrko?

    ReplyDelete

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