Inventory consignment

Inventory Consignment is a concept in which inventory availability of one inventory organization can be accounted as part of inventory availability of another inventory organization. The inventory organizations participating in the inventory consignment program are called consumable inventory organizations and consuming inventory organizations.

A consuming inventory organization can choose a list of consumable inventory organizations to participate with itself. Inventory availability of consumable inventory organizations can be accounted as part of inventory availability of the consuming inventory organization. A consumable inventory organization cannot be a consuming inventory organization of another inventory organization. This means that only one level of relationship is allowed.

Inventory Consignment enables consuming inventory organizations to maintain an inventory at a consumable inventory organization until just prior to shipping, at which point ownership of the inventory is transferred from the consumable inventory organization to the consuming inventory organization. This enables a consuming inventory organization to greatly reduce its carrying cost, while still maintaining an accurate inventory picture because while it does not technically own the inventory until it is shipped, it can still be counted as an available inventory.

Note: The Transfer of ownership of the inventory prior to shipping should be done manually by calling transferInventoryOwnership API before shipping.

In an enterprise and vendor model, a enterprise's inventory organization can be configured as a consuming inventory organization. Inventory organizations of vendors, who participate with the enterprise, can be configured as a consumable inventory organizations.

Note: When transferring inventory ownership, the system assumes that the consumable inventory organization and consuming inventory organization have the same product class.

While obtaining availability of a consumable inventory organization through promising functions, system will try to maximize its availability by assigning the excess demand of the consuming inventory organization to other participating consumable inventory organizations first, if possible.

Inventory rules are read based on the consuming inventory organization. In a configuration where a consumable inventory organization participates with multiple consuming inventory organizations, the system validates whether all the participating consuming inventory organizations have the same set of inventory rules. These inventory rules are Rules within ATP rules such as Use Item Based Allocation, Use Future Supply of Inventory Node Control, Future Supply Type Safety Factor Percentage, Onhand Supply Type Safety Factor Percentage, and Default Distribution Rule ID.

The inventory rules of the consuming inventory organization will be used while obtaining inventory availability for the consuming inventory organization and consumable inventory organization. The sourcing and scheduling related rules of the inquiring organization will be used for the promising functions.