SD / O2Cintermediate

SD Consignment Part 3: Consignment Stock Valuation, MM Integration and Reconciliation

Key takeaway

Keep consignment stock under control: valuation of special stock W, stock overviews per customer, physical inventory at customer sites, consumption reporting and automatic issue orders, reconciliation of stock and billing, and period-end checks.

Explanation

📌 KEY POINTS
✅ Customer consignment stock remains in your valuated inventory (special stock W) until issued.
✅ Stock per customer is visible in stock overviews (e.g. MMBE, MB58).
✅ Periodic physical inventory at customer sites reconciles system vs actual stock.
✅ Consumption reporting (manual, portal, EDI) drives issue orders and billing.
⚠️ Delayed consumption reporting shifts revenue and hides stock differences until the count.

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▶ WHERE WE ARE
Parts 1–2 covered process and configuration. Now control and reconciliation.

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▶ 1. VALUATION

Special stock W valued at your plant's valuation (no revenue until issue).
Fill-up is a stock transfer, not a sale.

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▶ 2. STOCK OVERVIEW

Per customer and material; aging of consignment stock.

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▶ 3. CONSUMPTION REPORTING

Customer reports usage (period, EDI, portal).
Issue orders created from reports; billing follows.

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▶ 4. PHYSICAL INVENTORY

Counting at customer sites with inventory documents for special stock.
Differences: issue (billing) or write-off per agreement.

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▶ 5. PERIOD-END

Reconcile consignment stock value, issues billed, open consumption reports.

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▶ STEP BY STEP

Review consignment stock per customer.
Create issue orders from consumption.
Run a count and post differences.

✅ CHECKPOINT: consignment stock and billed consumption reconcile every period.

Code example

ABAP Code

===== STEP 1: stock and reports =====MMBE special stock W | MB58 consignment stock at customerConsumption report → issue order KE → delivery → invoice F2 ===== STEP 2: physical inventory =====Physical inventory document for special stock W (customer consignment) → count → post differences ===== STEP 3: period-end checklist =====Stock value W per customer | consumption reports received | issues billed | differences resolved

Real project scenario

A distributor's consignment stock value grew for years because dealers reported consumption irregularly. A count revealed 12% of the stock had been used but never billed. Monthly EDI consumption reports, automatic issue orders and quarterly counts with contractual rules for differences recovered revenue and kept balances accurate.

Common mistakes

No regular consumption reporting.
No counts at customer sites.
Treating fill-up as revenue.
Ignoring aged consignment stock.
No contractual rules for differences.

Best practices

Agree reporting cadence and format.
Automate issue orders from reports.
Count regularly.
Monitor aging.
Reconcile each period.

Interview angle

Questions: "How is consignment stock valued?", "How do you reconcile consignment stock?", "How are consumption reports processed?"
Strong answer: special stock W valued as own inventory, stock overviews per customer, consumption reporting to issue orders and billing, physical inventory of special stock, period-end reconciliation.

Practice this lesson

Quick check

1. What happens in inventory management when goods issue is posted for a consignment issue delivery?

2. A customer has consignment stock that has never been billed and now wants to return the unused quantity to the plant. Which consignment sub-process should be used?

3. How is revenue for consumed consignment goods captured regularly?

Interview questions

1. Consignment stock value keeps growing and a count shows goods consumed but never billed. How do you fix the process?

Answer it in your own words first, then compare.

2. A customer receives consignment fill-up stock, later some is issued and some returned unused. How does copy control across the consignment process (fill-up, issue, pick-up, returns) ensure correct stock and billing treatment?