Oracle Fusion Applications

Consigned Inventory from Supplier Demo Flow

Contents
Demo Flow Overview ................................................................................................................................ 3
Consignment Agreement .......................................................................................................................... 4
Consignment Order ................................................................................................................................... 5
Consignment Receipt and Put Away ......................................................................................................... 7
Consigned Inventory On-Hand Quantity................................................................................................... 8
Transfer to Owned .................................................................................................................................... 9
Review Completed Transactions............................................................................................................... 9
Create Consumption Advice ................................................................................................................... 10
Review Consumption Advice .................................................................................................................. 11
Create Invoice ......................................................................................................................................... 12
Demo Flow Overview
Consigned inventory refers to items in the possession of one party but remain the property of
another party by agreement with those in possession.

The consigned inventory demo flow starts with a buyer creating a consignment agreement with a
supplier. The consignment agreement will state the terms of the agreement, items to be
purchased on consignment, and the price associated with the items. The buyer will periodically
generate consignment (purchase) orders requesting the supplier to ship goods. Once the
inventory has been received, it will be held as consigned stock. The inventory will be in the
possession of the buyer. However, the ownership of the inventory will remain with the supplier.
The change of ownership occurs when the buyer consumes the inventory or the aging period
expires. Once the inventory has been consumed, a consumption advice will be generated based
upon a frequency agreed upon between the buyer and supplier. The consumption advice is used
to communicate to the supplier the consumption transactions that occurred within a given period
of time. The consumption advice also serves as the document to initiate financial settlement for
the consumed inventory. The supplier can send in invoices for the consumed material and the
accounts payable personnel can process these into payments. Alternatively, the consumption
advice can be used by the buyer to self-bill based on usage of the consigned inventory.

Figure 1: Consigned Inventory from Supplier Process Flow

Consignment Agreement

The first step in the process flow is to create a Consignment Agreement. The Consignment
Agreement stores the terms of the consignment arrangement between the buyer and seller.

Important! Select the Agreement Style: Consignment Agreement

Select the Style: Consignment Agreement

Figure 2: Create Consignment Agreement

There is a separate tab Consignment Terms on the agreement that stores the consigned
inventory related terms. The terms and an explanation of their functionality are listed below.

Aging Onset Point: Event point when the aging period starts. Values include Receipt,
Shipment and None
Aging Period Days: Number of days before aging period expires.
Consumption Advice Frequency: Period for which the consumption advice is generated.
Values include Daily, Weekly and Monthly.
Billing Cycle Closing Date: Date when the billing cycle closes.
Consumption Advice Summary: Level of granularity at which the consumption advice is
created. Values include All Organizations, Organization, Organization and Item and
Organization, Item and Transaction Date
 Pay on Use: Payment is automatically made to the supplier upon usage/consumption of
consigned inventory.
Default line as consignment line:

Figure 3: Consignment Agreement Terms

Consignment Order

Each template includes table-specific instructions, guidelines, and best practices for preparing
the data file for upload. The instructions can be found by opening the worksheet Instructions

Important! Select the Purchase Order Style: Consignment Order

Figure 4: Consignment Order

Figure 5: Consignment Order Details

Consignment Receipt and Put Away

The receipt process for consigned inventory is identical to non-consigned inventory. The
consigned inventory receipt will include a Consignment Line indicator. This checkbox is a
visual indictor to the user that the receipt line is for consigned inventory.

Navigation: Warehouse Operations > Receipts > Receive Expected Shipments

Figure 6: Receive Lines

The put away process for consigned inventory is identical to the put away process for non-
consigned inventory. The consigned inventory put away will include a Consignment Line
indicator. This checkbox is a visual indictor to the user that the put away line is for consigned
inventory.

Navigation: Warehouse Operations > Receipts > Put Away Receipts

Figure 7: Put Away Lines

Consigned Inventory On-Hand Quantity

The Manage Item Quantities UI will enable you to view owing party details associated with the
consigned inventory. The tab Consigned Details allows you to the Owning Party, Owning Party
Site, and Quantity for the consigned inventory.

Navigation: Warehouse Operations > Inventory

Figure 8: Manage Item Quantities

Transfer to Owned

The Create Transfer to Owned Transaction UI enables you to transfer consigned inventory to
owned inventory. This UI is used to explicitly transfer consigned inventory to owned inventory.

Click on the Select and Add icon to select the consigned inventory that you intend to transfer.

Important! Consigned inventory can also be transfer to owned inventory automatically by

using Consigned Inventory Consumption Rules. For demo purposes, the Create Transfer to
Owned Transaction UI is being shown.

Figure 9: Create Transfer to Owned Transaction

Review Completed Transactions

The Review Completed Transactions UI will enable you to search for consigned related
transactions. There are two specific consigned inventory related transactions.

Transfer to Owned Transaction that transfers consigned inventory to owned inventory.

Transfer to Consigned Transaction that transfers owned inventory to consigned
inventory.
Figure 10: Create Transfer to Owned Transaction

Create Consumption Advice

The Create Consumption Advice scheduled process is used to report the consumption of
consigned inventory to the supplier. The consumption advice is generated periodically based on
the consumption advice frequency defined on the consignment agreement.

The Create Consumption Advice scheduled process parameters and an explanation of their
functionality are listed below.

Supplier: Creates consumption advice for a specific supplier.

Supplier Site: Creates consumption advice for a specific supplier site.
Display Lots and Serial Numbers: IndicPeriod for which the consumption advice is
generated. Values include Daily, Weekly and Monthly.
Group by Transaction Type: Date when the billing cycle closes.
Create Consumption Advice Report: Indicates if the consumption advice report should be
created automatically.
Figure 11: Create Consumption Advice

Review Consumption Advice

Each column

Figure 12: Review Consumption Advice

Create Invoice

The Payable Create Invoice UI has been extended to allow invoices to be matched against a
consumption advice.

Figure 13: Match Invoice Lines

This completes the demo flow.