Work with consignment inventory
Consignment inventory is inventory that a vendor owns and stores at your site. When you're ready to consume or use the inventory, you take over ownership of it.
Consignment replenishment orders
A consignment replenishment order is a document that you can use to request and keep track of inventory quantities of products that a vendor intends to deliver within a certain date interval by creating ordered inventory transactions.
Typically, this consignment replenishment order is based on the forecast and actual demand of specific products. The inventory that you receive against the consignment replenishment order remains in the ownership of the vendor. You only record the possession of the products that are related to the physical receipt update; therefore, no general ledger transaction updates occur.
You can use the Owner dimension to separate information about which inventory the vendor owns and which inventory the receiving legal entity owns.
Consignment replenishment order lines have an Open order status if the full quantity of the lines isn't received or canceled. When the full quantity is received or canceled, the system changes the status to Completed.
You can record the physical on-hand inventory that's related to a consignment replenishment order by using a registration process or a product receipt update process. You can complete registration as part of the item arrival process or by manually updating the order lines.
When you use the product receipt update process, the system creates a record in the Product receipt journal, which you can use to acknowledge the receipt of goods to the vendors.
Inventory ownership change journal
To change the owner of the inventory from the vendor to the receiving legal entity, you can use an Inventory ownership change journal. The system doesn't create expected inventory transactions for the journal. The only inventory transactions that the system creates are those that relate to a posted journal.
When you post the journal:
You can issue the vendor-owned inventory by using an Ownership change reference with a Sold status.
The legal entity that's consuming it receives the on-hand inventory by using a product receipt updated inventory transaction on the purchase order. This step sets the status of the order to Received. Purchase orders that you use for consignment have the Origin field set to Consignment.
You can't update the quantity on consignment purchase order lines after you create the order.
Vendor collaboration in consignment processes
If your vendors use the vendor collaboration interface of Supply Chain Management, they can use it to monitor the consumption of inventory at your site.
The vendor collaboration interface has three pages that relate to the inbound consignment process:
Purchase orders consuming consignment inventory - Shows detailed purchase order information that's related to the ownership change from the consignment process.
Products received from consignment inventory - Shows information about the items and quantities that have product receipts updated during the ownership change process.
On-hand consignment inventory - Shows information about the consignment items that they're expected to deliver and the items that are already physically available at the customer site.
For more information, see Configure and manage vendor collaboration in Dynamics 365 Supply Chain Management.
Tracking dimension group
You must associate items that you plan to use in consignment processes with a Tracking dimension group where the Owner dimension is set to Active. The Owner dimension always has the Physical inventory and Financial inventory options selected. The Coverage plan by dimension option is never selected.