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Consignment stock

Overview

Consignment stock refers to inventory that is owned by a supplier but stored at your premises. When the stock is needed for sale or production, the ownership of the stock must be transferred from the supplier to you.

D365 Setup

Essentially, the setup for consignment stock is very simple and requires two pieces of configuration. Firstly, the released product needs to be set up with a tracking dimension group that has the Owner dimension activated. This tells D365 that the owner of the stock needs to be tracked.

Secondly, the owner stock dimension value must be associated with the supplier. This is achieved via Stock management > Setup > Dimensions > Stock owners:

D365 Process

Once the above setup is complete there is a simple process to follow:

  • Consignment replenishment orders – Consignment stock is replenished through replenishment orders. These are found under Procurement and sourcing > Consignment > Consignment replenishment orders. These orders have a very simple UI with a header and lines.

  •  The supplier does not receive a physical order document, but can see the requirement in the Supplier collaboration > Consignment stock > On-hand consignment stock view in the supplier collaboration portal instead.

  • The supplier will then deliver the stock, which will be registered by the warehouse with the normal procedure or a Product receipt carried out directly in the Consignment replenishment order. The key difference here to a normal purchase receipt is that no general ledger transactions will have been generated at this stage as the stock is still owned by the supplier.
  • Inventory ownership change journal – Before the above stock can be sold or used in production, the ownership of the stock must be changed via Procurement and sourcing > Consignment > Stock ownership change. Once the journal is posted, a purchase order is automatically created and received ready to be matched against the invoice when it arrives. The usual general ledger transactions are generated at this point. The product is now the organisation’s property and can be used as required.
Learning with Microsoft

Further information related to consignment stock can be found on Microsoft Learn via the URLs below.

Set up consignment – Supply Chain Management | Dynamics 365 | Microsoft Learn

Work with consignment inventory – Training | Microsoft Learn