Using Supplier Consigned Inventory
The system records the receipt of consigned inventory with a CN-RCT transaction instead of a standard RCT-PO. The RCT-PO occurs when items are used, causing transfer of ownership from the supplier and making the items available for receiver matching.
Inventory can be consumed at various points in the manufacturing process, initiating the transfer of ownership. Some examples include the following:
• Issue to a manufacturing order, such as a work order, repetitive order, flow schedule, or final assembly work order.
• Issue to a sales order.
• Backflush in a manufacturing process.
• Manually use in a consignment aging program.
• Transfer to a location that is defined as initiating an ownership transfer, either an inventory transfer or issue to a distribution order.
For inventory transfers (ISS-TR) and issues to distribution orders (ISS‑DO), transfer of ownership depends on the value of the Transfer Ownership field associated with the receiving location. When this is Yes, usage transactions occur.
Other types of issues always transfer ownership. These include ISS-SO, ISS-WO, ISS-FAS, ISS-UNP.
The value of Use Consigned First in Supplier Consignment Control determines how the system processes inventory when consigned and non-consigned items are located together.
GL Effects of Usage
Issuing items with an ownership transfer updates the following consignment accounts:
• Credits the PO Consigned Inventory account defined in Purchasing Account Maintenance for the product line, site, and supplier type
• Debits the PO Consigned Offset account defined in Purchasing Account Maintenance for the product line, site, and supplier type
In addition, transactions are created for all of the accounts normally updated during a PO receipt.
Once a usage transaction (RCT-PO, CN-ISS) occurs, the quantity associated with the receiver is available to be matched with the supplier invoice. Receiver matching of receipts for consigned items occurs in the same way as standard items. Re-averaging of costs takes place when consigned inventory is consumed.
Average costing occurs upon transfer of ownership or at usage of supplier-consigned inventory. Re-averaging of the item cost for non-consigned on-hand inventory is initiated at the time of receipt.
Notifying Suppliers of Usage
You can use two methods to notify your suppliers that you have used consigned inventory:
• Generate a report to send to them.
• Use EDI eCommerce to export usage data.
Generating a Usage Export Report
Use Consignment Usage Export Report (5.18.10) to notify your supplier about consigned items you have used. This is useful if you are not using EDI eCommerce transmissions to communicate usage records.
When run in update mode, the system marks selected records as having been reported. These records are not included the next time the report is run.
Use Consignment Usage Report to see all inventory that has been used regardless of whether it has been reported to the supplier.
Exporting EDI Files
Use Consignment Usage Export (35.4.2) to notify your trading partners, defined in EDI eCommerce, of inventory transactions (RCT-PO, CN-ISS) initiating a transfer of ownership.
Enter ranges of selection criteria for purchase order, item number, supplier, site, and transaction usage dates that apply to the records you want to export. When your supplier imports this information, they can then invoice you for the items used.
Using Supplier Consignment and Customer Consignment
If you have both consignment modules active, you can ship items received from a supplier on consignment to one of your customers to be kept on consignment at the customer facility. This type of consignment activity is called a pass through.
Example: Your company manufactures printers and ships to large distributors. You receive ink cartridges from one of your suppliers on consignment. When you ship printers to your distributors, you send ink cartridge kits with them on consignment.
In this kind of business scenario, the receiver matching of the items received from your supplier is delayed until your customer uses the items and you receive the usage information from them. To manage this delay, shipping the items does not create an ISS-SO transaction, but a CN-SHIP. When your customer uses the item, the CN-USE transaction triggers the RCT‑PO and CN-ISS on the supplier consignment side.
See “Shipping Consigned Inventory” in the Customer Consignment Inventory chapter of
QAD Sales User Guide.
Using Supplier Consignment with Kanban
When you use Kanban Fill/Receive (17.6.5) to receive and transfer kanban-controlled items, three types of kanban transactions can occur: purchase receipt, item movement, and production receipt.
Inventory balances are updated depending on the setting of Impact Inventory in Kanban Master Maintenance (17.1.1). When Impact Inventory is Yes for a kanban card and the items involved are consigned, additional consignment transactions also occur.
• Executing a purchase receipt transaction records a CN-RCT instead of the standard PO-RCT.
• Executing an item movement transaction creates PO-RCT, CN-ISS transactions if the receiving location is set up for ownership transfer.
• Executing a production receipt transaction creates PO-RCT, CN-ISS transactions as well as the WO-ISS transaction.