Consuming goods from a Supplier Consignment Stock (SCS) inventory contract

Sell the supplier-owned goods to your customer

When you want to sell the goods that are owned by the supplier but located at your warehouse site, (including any NCC stock that was rejected during the Supply CMI process of the inventory contract), the sale will take place via sales order entry but the order must be connected to the SCS inventory contract from which you want to sell the goods.

Note: It is recommended to use the sales order type that has been set up for SCS-contracts. If you choose to use a different sales order type, it must be defined to update stock on hand. It is possible to use a sales order type with direct invoice (i.e. no pick list print).

You can choose from the following to link the sales order line to the SCS inventory contract during sales order entry:

Manually link the inventory contract on the Create new panel, the sales order header, alternatively on the sales order line. For the sales order line location, you can do this on the Order line, Main info panel, or on the Customer and item info, Line entry panel when creating a new sales order line using full entry mode (i.e. you clicked the Cust info function key on the Order lines panel). When such a reference is defined, the entered lines are validated against the inventory contract and the warehouse is retrieved from the inventory contract.
A setting on the Inventory contract header controls the possibility to combine sales order lines (i.e. lines connected to an inventory contract and others not connected to an inventory contract) on a sales order when you define the contract number on the sales order header.

If the Off-contract sales flag is set to YES, and the warehouse for the non-contract item is included and activated in your sourcing policy, a warning will be issued, (denoting that the item is not found on the inventory contract and that normal sourcing will take place), but you will be able to add sales order lines for non-contract items to the sales order as well as items from other inventory contracts.

If the Off-contract sales flag is set to NO, an error message will be issued and it will not be possible to add a sales order line for a non-contract item to the sales order. It will also not be possible to add a sales order line for items from other inventory contracts. However, if this flag is set to NO and if the inventory contract is only defined on line level, it will still be possible to mix lines for this inventory contract together with non-contract items and/or items from other inventory contracts.
Use the Inventory contract availability program. Click the Inventory contr availability program function on the Order lines panel. All contract lines with an available quantity for a specific inventory contract will be listed. The inventory contract can either be the contract which was referred to (on the Create new panel) when the sales order was created, or another inventory contract which can be defined on this panel. You can leave the quantity as is or enter the applicable quantity for the line and then select the line to create the sales order line.
Enter a warehouse manually during sales order entry. When a sales order is created, it is possible to enter a default “From warehouse”. It is also possible to manually enter a warehouse on the sales order line panel. If the defaulted or entered warehouse is an SCS-warehouse, a search will take place to find the inventory contract automatically. This will be done even if auto-sourcing is not on for the sales order.
If a sourcing policy was set up in your system, and it contains the warehouse used for SCS inventory contracts, and auto-sourcing is configured, you do not need to make a reference to the inventory contract during sales order entry. As a result of the auto-sourcing, the sales order line will be sourced using this inventory contract.

Select the Work with sales order menu item.
On the Work with sales orders, Header view panel click the Add option.
Create your sales order and link the inventory contract to the line as per one of the choices above.
On the Work with sales orders, Order lines panel, complete the mandatory information and click OK to create the item. (If the order type used for the order was set up as direct Invoice (i.e. no pick list print), you will be prompted with the Location confirmation, Pick panel if the item is under location handling, where you will have to fill in the actual quantity, zone and location and then confirm. Once confirmed, the order is ready to be invoiced. See step 9). The inventory contract is linked to the sales order line. Note: If the quantity you are selling is from NCC stock, click the Change option on the Work with sales orders, Order lines panel. On the Work with sales orders, Order line, Main info panel, complete the NCC number field.

Click this link to expand and view the information that has been updated for the inventory contract:

Log file for the line

(Highlight the line and click the Log file option)

Inventory contract line details

(Highlight the line and click the Display option)

Time axis enquiry

Warehouse balance enquiry

The following post has been created:

Order line created

For this post, the following is also listed:

– The date it was created

– The time it was created

– Type of order (in this case S for sales order)

– Sales order number

– Sales order type used for the sales order.

For normal stock:
Reservations quantity has increased with the quantity on the sales order line.

Available has decreased with the quantity on the sales order line.

For NCC stock, no updates occur.

For the SCS-warehouse:

For normal stock, Reservation quantity has increased and Available quantity has decreased. For NCC stock, no updates occur.

For the Physical warehouse connected to the SCS-warehouse:

For normal stock, Reservation quantity has increased and Available quantity has decreased. For NCC stock, no updates occur.

For the SCS-warehouse:

For normal stock, Available quantity has decreased and Reserved quantity has increased. For NCC stock, no updates occur.

For the Physical warehouse connected to the SCS-warehouse:

For normal stock, Available quantity has decreased and Reserved quantity has increased. For NCC stock, no updates occur.

If the order type is not set up as Direct invoice, continue with the following steps:

Print the sales order confirmation document via the Order confirmation option on the Work with sales orders, Header view panel if the sales order type was defined to print this document. Otherwise go to the next step (Print the pick list).
Print the pick list, either via the Pick list option on the Work with sales orders, Header view panel or via the Print pick list menu item.
Confirm the pick list for the Physical warehouse (to which your SCS-warehouse is connected). (See About pick list confirmation for instructions regarding the two different routines that can be used to confirm the picking. The Work with pickings program is described below.)

Select the Work with pickings menu item.
You access the Work with pickings, Pickings view panel. The warehouse defined for your user profile is defaulted if defined there. If a warehouse is not defined for your user profile, then the main warehouse from the DIS control file is defaulted. If it is not your Physical warehouse that is connected to your SCS-warehouse, click the Select warehouse function key to change it to your Physical warehouse.
What you choose to do next depends on the situation. It could be that not everything is ready to be confirmed, requiring you to change the line quantity, or you can perform a full dispatch. Perhaps you need to define the zone/location from where to pick the goods. See Work with picking for more information about the tasks available.

Catch weight handling
If the order line was flagged for Catch weight handling, you will access the Work with pickings, Catch weights panel where you must enter the catch weight quantity for the order line. (See About catch weight handling for price units) The Quantity to add field displays the quantity that must be reported. Multiple catch weights can be entered for one order line, allowing you to have a separate weight for each individual item. All catch weights are then accumulated to be the price unit quantity for the order line and will also be used to re-calculate the order line value. As you report the quantity, the quantity in the Quantity to add decreases and the quantity in the Total actual qty and Total CW quantity fields increases. If a variance limit percentage range was set up for the item/sales unit that is under catch weight handling, and the entered catch weight quantity exceeds the variance range limit that is set up, you will access the Override allowed CW variance panel where you must enter your signature ID and the security code for the signature to accept the exceeding quantity and continue with catch weight entry. When the entire quantity has been reported, click the Confirm catch weight function key to confirm the entered catch weight quantity(ies). A validation will be performed to check that catch weight has been entered for the entire quantity.

Click this link to expand and view the information that has been updated for the inventory contract:

Log file for the line

(Highlight the line and click the Log file option)

Inventory contract line details

(Highlight the line and click the Display option)

Time axis enquiry

Warehouse balance enquiry

The following post has been created:

Order line picked

For this post, the following is also listed:

– The date it was created

– The time it was created

– Type of order (in this case S for sales order)

– Sales order number

– Sales order type used for the sales order.

For normal stock, Reservations has been reduced by the quantity picked.

On hand has been reduced by the quantity that you picked.

For NCC stock, NCC quantity has been reduced by the quantity that you picked.

Consumed has been increased with the quantity that you picked.

Disp not invoiced has been increased with the quantity that you picked but have not yet invoiced.

For the SCS-warehouse:

For normal stock, Net on hand, Available and Reservation quantity has decreased. For NCC stock, no updates occur.

For the Physical warehouse connected to the SCS-warehouse:

For normal stock, Net on hand and Reservation quantities have decreased. For NCC stock, no updates occur.

For the SCS-warehouse:

For normal stock, On hand and Reserved quantities have decreased. For NCC stock, no updates occur.

For the Physical warehouse connected to the SCS-warehouse:

For normal stock, On hand and Reserved quantities have decreased. For NCC stock, no updates occur.

Print the transport note via the Print transport notes menu item if the sales order type was defined to print this document. Otherwise go to the next step (Print the invoice).
Print the invoice, either via the Invoicing option on the Work with sales orders, Header view panel or via the Print invoices menu item. The log file for the inventory contract line will be updated with Order line invoiced post and the Disp not invoiced quantity on the inventory contract line details panel will be reduced by the quantity you invoiced.

You must now perform a call off notification to inform the supplier about the quantity that you have consumed (i.e. sold to your customer). See below.

Notify the supplier of sold (consumed) goods via a call off notification

When you have sold any quantity of the supplier-owned goods (i.e. you have not taken over the ownership for any quantity and then sold), you must notify the supplier that you have sold (consumed) their goods. This is done via a call off notification. This procedure can be done via one of the following:

Call off notification option on inventory contract header level. When you use this alternative, the selection fields are filled with the necessary information.
Or
Create call off notification menu item. When you use this alternative, you must fill in your selections.

Either way, purchase order lines will be created for the total charged consumption. It is possible to create a purchase order line which holds the sum of all invoiced sales order lines, (by keeping the Transaction summary flag set to YES on the Create call off notification panel) but it is also possible to get one purchase order line for each sales order line (by blanking out that flag). The created purchase order will not update any stock on hand. It will only be used for financial purposes.

Note: If the purchase order type set up in the system for the purchase order that is created during the running of the call off notification is defined with an immediate reception or no document printout for Order, no purchase order printout (i.e. call off notification document) will be printed that can be sent to the supplier. Hence, how you notify the supplier will be up to you (e.g., by email or some other means).

Select either the Call off notification CMI process on inventory contract header level for the SCS-contract, or the Create call off notification menu item.
You access the Create call off notification panel. Complete the application selection parameters and click OK.
If any information is missing for the purchase order, you will access the applicable purchase order panel where you must enter the missing information. After clicking OK, one or several purchase order lines per item will be created (depends on the setting of the Transaction summary flag). The log file for each (applicable) inventory contract line will be updated.

Click this link to expand and view the information that has been updated for the inventory contract:

Log file for the line

(Highlight the line and click the Log file option)

The following post has been created:

Call off notification created

For this post, the following is also listed:

– The date it was created

– The time it was created

– Type of order (P for purchase order)

– Purchase order number

– Purchase order type for the purchase order that was set up for this Call off notification procedure. If the purchase order type was set up as an immediate reception or no document printout for Order, no purchase order printout (i.e. call off notification document) will be printed. You will have to notify the supplier in some other way.

If the purchase order type was not set up as an immediate reception continue with the following steps:

Print the purchase order document (i.e. the call off notification document) via the Print order option on the Work with purchase orders, Header view panel if the purchase order type was defined to print this document. Otherwise go to the next step (Print the reception note).
Print the reception note via the Reception note option on the Work with purchase orders, Header view panel. Note: Even though the purchase order type for this inventory contract is defined to print the reception note, it is only mandatory if you choose to receive the goods via the Work with receptions menu item, (which is described below). There are two other ways to perform a reception: 1. via the Receive replenishment line menu item, and 2. via the Work with purchase order reception menu item. The reception note printout is not mandatory if you choose those methods.
Receive the line. This must be done for your Physical warehouse that is connected to your SCS-warehouse even though you will not physically receive the goods on the line. You must run through the reception note confirmation to progress the purchase order through the system and close it. (See About receiving goods for instructions regarding the three different routines that can be used to receive the goods. The Work with receptions program is described below.)

Select the Work with receptions menu item.
On the Work with receptions, Receptions view panel, the warehouse defined for your user profile is defaulted if defined there. If a warehouse is not defined for your user profile, then the main warehouse from the DIS control file is defaulted. If it is not the Physical warehouse that is connected to your SCS-warehouse, click the Select warehouse function key to change it to your Physical warehouse.
What you choose to do next depends on the situation. It could be that not everything was shipped, requiring you to change the line quantity, or you can perform a full confirmation. Perhaps you need to define the zone/location of where to put the goods. Perhaps a batch ID needs to be defined. See Work with receptions for more information about the tasks available.

Catch weight handling
If the order line was flagged for Catch weight handling, you will access the Work with receptions, Catch weights panel where you must enter the catch weight quantity for the order line. (See About catch weight handling for price units) The Quantity to add field displays the quantity that must be reported. Multiple catch weights can be entered for one order line, allowing you to have a separate weight for each individual item. All catch weights are then accumulated to be the price unit quantity for the order line and will also be used to re-calculate the order line value. As you report the quantity, the quantity in the Quantity to add decreases and the quantity in the Total actual qty and Total CW quantity fields increases. If a variance limit percentage range was set up for the item/purchase unit that is under catch weight handling, and the entered catch weight quantity exceeds the variance range limit that is set up, you will access the Override allowed CW variance panel where you must enter your signature ID and the security code for the signature to accept the exceeding quantity and continue with catch weight entry. When the entire quantity has been reported, click the Confirm catch weight function key to confirm the entered catch weight quantity(ies). A validation will be performed to check that catch weight has been entered for the entire quantity.

Take over the ownership of the supplier-owned goods but keep the stock located at your warehouse site

This process can be run when you decide that a quantity shall be owned by you instead of the supplier. It can be run at any time (i.e. either before you start selling the goods or after, assuming there is a remaining contracted quantity).

Running this process will create a purchase order that is used for financial purposes, since you are buying the goods from the supplier. But even though the goods are already physically located in your warehouse, they have to be moved from the logical SCS-warehouse to an internally owned (Trade) warehouse that is linked to the same physical warehouse. This type of purchase order, which is created for the ownership takeover, will not run through the normal reception routine. Instead you will run the Confirm ownership transfer routine. Running this routine will, from one panel, take care of the pick from the SCS-warehouse and the put away to the trade warehouse. Depending on the location/owner set-up it may be alright to leave the goods in the same warehouse location, or it may be required to move the goods to another location.

Do as follows:

Select the Work with inventory contracts menu item.
Highlight the SCS-contract and select the Lines option.
Highlight the applicable line and click the Ownership takeover option.
You access the Create ownership takeover (purch) order panel. Enter the warehouse ID for an internally owned logical (Trade) warehouse that is linked to the same physical warehouse in which the goods are stored and the quantity that you want to take over.
You access the Work with purchase orders, Order line, Main info panel. Click OK to create the purchase order and return to the Work with inventory contracts, Lines panel.

Click this link to expand and view the information that has been updated for the inventory contract:

Log file for the line

(Highlight the line and click the Log file option)

Inventory contract line details

(Highlight the line and click the Display option)

Time axis enquiry

Warehouse balance enquiry

The following post has been created:

Order line created

For this post, the following is also listed:

– The date it was created

– The time it was created

– Type of order (in this case P for purchase order)

– Purchase order number for the purchase order

– Purchase order type for the purchase order that was set up for this CMI process and inventory contract type. The order type dictates the remaining steps in this Ownership takeover procedure. (Follow the remaining steps below).

Reservations has increased with the quantity on the purchase order that you are taking over.

Available has decreased with the quantity on the purchase order that you are taking over.

For the Physical warehouse:

On order and Available quantities have increased.

For the logical (Trade) warehouse:

On order and Available quantities have increased.

For the Physical warehouse:

On order quantity has increased. Note: The Available quantity will not increase until the ownership transfer has been confirmed.

For the logical (Trade) warehouse:

On order quantity has increased. Note: The Available quantity will not increase until the ownership transfer has been confirmed.

Print the purchase order document via the Print order option on the Work with purchase orders, Header view panel if the purchase order type was defined to print this document. Otherwise go to the next step (Confirm ownership takeover).
You must now confirm the ownership takeover:

Select the Confirm ownership transfer menu item.
Highlight the inventory contract for the purchase order you created and click Select.
You access the Ownership transfer confirmation, Ownership takeover panel listing the Suggested quantity for the line that you want to transfer from the warehouse and owner (From warehouse and From owner) to your internally owned logical Trade warehouse (To warehouse and To owner). Note: The transferred quantity cannot exceed the suggested quantity, nor can a partial quantity on a pallet be moved to another location during ownership transfer. The whole quantity on the pallet must be moved to another location during ownership transfer. You can confirm the transfer as follows:

Manually enter the Transferred quantity or click the Full transfer function key to load the quantity into the Transferred quantity.
Enter the From zone/location and To zone/location. The From location can be selected via the Select from location option. Note: If the item is a batch item, the Select from location option must be used. The Select from location panel displays the batches. If the CMI-BATH (CMI – Batch handling) function is active in the Function control file, only batches added during the supplying process to the contract line can be used. If that function is not activated, the system will not control the matching between an inventory contract line and a batch number.
Click the Confirm function key to confirm the transfer.

Click this link to expand and view the information that has been updated for the inventory contract:

Log file for the line

(Highlight the line and click the Log file option)

Inventory contract line details

(Highlight the line and click the Display option)

Time axis enquiry

Warehouse balance enquiry

The following post has been created:

Order line received

If you transferred the entire remaining quantity for the inventory contract line (i.e. no available quantity exists), the following post has also been created:

Contract line was closed

For these posts, the following is also listed:

– The date it was created

– The time it was created

– Type of order (in this case P for purchase order)

– Purchase order number for the purchase order

– Purchase order type for the purchase order.

On hand has decreased with the quantity you took over.

Reservations has decreased with the quantity you took over.

Consumed quantity has increased.

For the SCS-warehouse:

Net on hand and Available quantities have decreased.

For the Physical warehouse:

Net on hand and Available quantities have increased and On order quantity has decreased.

For the logical (Trade) warehouse:

Net on hand and Available quantities have increased and On order quantity has decreased.

For the SCS-warehouse:

Available and On hand quantities have decreased.

For the Physical warehouse:

Available and On hand quantities have increased and On order quantity has decreased.

For the logical (Trade) warehouse:

Available and On hand quantities have increased and On order quantity has decreased.

Return the goods and ownership to the supplier via the Transfer to supplier CMI process

This process can be run when you decide that you no longer want to keep the supplier-owned goods in your warehouse (i.e. the SCS-warehouse set up in your system). You want to send them back to the supplier, and give back the ownership to the supplier. A logistic return order is created, i.e. the opposite type of order that is created for the initializing supply process. The reception routine has to run for the return order (unless it is defined for direct return), in order to get the correct update for the SCS-warehouse.

Select the Work with inventory contracts menu item.
Highlight the SCS-contract and select the Lines option.
Highlight the inventory contract line and click the Transfer to supplier option.
You access the Work with inventory contracts, Create transfer back to supplier order panel. Leave the quantity as is or change to that applicable. You can choose to maintain the return purchase order after creation by setting the Maintain order flag to YES. Click OK to create the return purchase order and return to the Work with inventory contracts, Lines panel. The inventory contract is automatically linked to the order line. Note: If anything on the return purchase order is erroneous, you will access the panel where the error exists (Header or Line level) in the Work with purchase orders program after you click OK, where you will have to correct the errors and then click OK to create the return purchase order.

Click this link to expand and view the information that has been updated for the inventory contract:

Log file for the line

(Highlight the line and click the Log file option)

Inventory contract line details

(Highlight the line and click the Display option)

Time axis enquiry

Warehouse balance enquiry

The following post has been created:

Order line created

For this post, the following is also listed:

– The date it was created

– The time it was created

– Type of order (in this case P for purchase order)

– Purchase order number for the return purchase order

– Purchase order type for the return purchase order that was set up for this CMI process and Inventory contract type. The order type dictates the remaining steps in this Return to supplier procedure. (Follow the remaining steps below).

Available has decreased with the quantity that you are returning for the SCS-warehouse

On return order has increased with the quantity on the return purchase order line for the SCS-warehouse.

For the SCS-warehouse:

Net on hand and Available quantities have decreased.

For the physical warehouse connected to the SCS-warehouse:

Net on hand and Available quantities have decreased.

For the SCS-warehouse:

Available quantity has decreased and Reserved quantities have increased.

For the physical warehouse connected to the SCS-warehouse:

Available quantity has decreased and Reserved quantity has increased.

Print the purchase order document via the Print order option on the Work with purchase orders, Header view panel if the purchase order type was defined to print this document. Otherwise go to the next step (Print the return note).
Print the return note.

Select the Work with purchase orders menu item.
On the Work with purchase orders, Header view panel, highlight the order and click the Reception note option to print the return note.

Return the line (if the order type used for the return order is not set up with an immediate return).

Select the Work with receptions menu item.
You access the Work with receptions, Receptions view panel. The warehouse defined for your user profile is defaulted if defined there. If a warehouse is not defined for your user profile, then the main warehouse from the DIS control file is defaulted. If it is not your Physical warehouse that is connected to your SCS-warehouse, click the Select warehouse function key to change it to your Physical warehouse.
On the Work with receptions, Reception view panel, highlight the reception and click the Lines option.
You access the Work with receptions, Details panel. You are returning goods that are physically located in your warehouse. So even though you are running a reception, you are actually picking something out from the warehouse. This means that you have to enter the Zone and Location from where you are picking the goods to be returned. Enter the Received qty and click OK, or click the Full reception function key and then OK.
On the Work with receptions, Lines panel click the Confirm function key to confirm the return. The quantity on the inventory contract line has now been returned.

Click this link to expand and view the information that has been updated for the inventory contract:

Log file for the line

(Highlight the line and click the Log file option)

Inventory contract line details

(Highlight the line and click the Display option)

Time axis enquiry

Warehouse balance enquiry

The following post has been created:

Order line received

If you consumed (i.e. returned) the entire quantity for the inventory contract line, the following post has also been created:

Contract line was closed

For those posts, the following is also listed:

– The date it was created

– The time it was created

– Type of order (in this case P for purchase order)

– Purchase order number for the return purchase order

– Purchase order type for the return purchase order.

On hand has decreased by the quantity that you returned.

On return order has decreased by the quantity that you returned.

Consumed has increased with the quantity that you returned.

No updates were booked for either warehouse, since the updates were done when the return order was placed.

For the SCS-warehouse:

On hand and Reserved quantities have decreased.

For the Physical warehouse connected to the SCS-warehouse:

On hand and Reserved quantities have decreased.

Sell the supplier-owned goods to your customer

Notify the supplier of sold (consumed) goods via a call off notification

Take over the ownership of the supplier-owned goods but keep the stock located at your warehouse site

Return the goods and ownership to the supplier via the Transfer to supplier CMI process

Related topics