Inventory is allocated to the sales order by either general or detail allocations. This is standard processing. Inventory is packed and shipped to the customer according to the requirement dates, times, and quantities. Traditional shipping documents are generated and advance ship notice (ASN) information is transferred to the customer as required (step 2 in Consignment Inventory Business Flow).

The consigned inventory is not yet available to be invoiced and must still be tracked until the customer has consumed it. Physically, the shipped inventory has left the manufacturing facility. The inventory is still tracked as either being in-transit or residing at a customer’s consignment location (step 3 in Consignment Inventory Business Flow).