Using Consignment in Dynamics 365 for Operations (AX7)

by | Updated January 2, 2018 | Dynamics 365 for Finance and Operations, Inventory

Consignment functionality is a valuable feature available in Dynamics 365 for Operations. Some organizations require the use of consignment inventory for production. In this type of scenario, the consignment production item is owned by a vendor and it is stored at the organization’s site or warehouse. The organization can take ownership of the item when the item is ready to be consumed on a production order.

High-level summary of the consignment process in Dynamics 365 for Operations

Create a Consignment Replenishment Order

Go to Procurement and sourcing > Consignment > Consignment replenishment orders and click New.

Create a Consignment Replenish Order

Register the Arrival of a Consignment Replenishment Order in an Arrival Journal or from the Consignment Replenishment Order

Click Inventory management > Inbound orders > Arrival overview.

Register the arrival of consignment order in Dynamics 365 for Operations

You can also register the arrival on the Consignment Replenishment Order.

Post a Product Receipt for a Consignment Replenishment Order

From the consignment replenishment order, click Generate > Product receipt.

Post product receipt

Transfer Vendor-Owned Inventory to a Production Location when needed.

When a production order is started, consignment items can be transferred to a production location. An inventory transfer journal can be used to accomplish this.

Go to Inventory management > Journal entries > Items > Transfer.

Transfer vendor owned inventory

Change Ownership of Consigned Inventory

You can change ownership of consignment inventory by using an Inventory ownership change journal. When you post an Inventory ownership change journal, it creates and receives a purchase order showing the change of ownership of the consignment inventory.

Go to Inventory management > Journal entries > Items > Inventory ownership change.

You can add lines manually or use Function > Create lines from production orders.

Change ownership of consigned inventory

When the ownership change of the consignment inventory is complete, a vendor invoice can be created and paid.

Vendor collaboration

The Vendor collaboration module allows external vendors to work with and view a customer’s purchase order, invoice, and consignment inventory information. A vendor can view items on-hand, consumption, and ownership changes by going to:

Vendor collaboration > Consignment inventory > Purchase order consuming consignment inventory

Vendor collaboration > Consignment inventory > Products received from consignment inventory

Vendor collaboration > Consignment inventory > On hand consignment inventory

Vendor Collaboration

Note: Additional setup and prerequisites required to use Consignment and Vendor collaboration are not covered in this blog post in detail.

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2 Comments

  1. Fatih Gork

    Let’s say you made a mistake and created 1000 pieces of consigned inventory through journal instead of 100. You can’t get rid of it anymore, can you?

  2. Taylor Valnes

    Hello Fatih Gork,

    I’ve spoken to the blog writer and got the following response.
    The process to reverse consignment transactions is limited and the process to use is dependent on what process you are doing. Consignment replenishment orders can be deleted, you can adjust the quantity of vendor-owned inventory after you have received it, and after you post a change of ownership, you can create a vendor return. You will be unable to use a Product Receipt Journal to correct a quantity or cancel the entire receipt.

    Regards,
    Taylor

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