Please help verify consignment process flow

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Posted on by bankk

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Hello:

My company was setup for consignment back several years ago. I was not employed with the company at the time. A user conveyed to me that they were told to follow this process for registering consignment inventory which doesn't make sense. The user was told it had to be done this way to avoid downstream /issues/. Issues were not defined to them.

So here it goes. When a consignment shipment is received. The inventory is put away without updating D365. What triggers the whole consignment process is receipt from our vendor of an invoice. I won't go into the details but the vendor knows when stock is consumed. At this point, we follow the normal consignment process. We create a replenishment order and receive it, but only for the amount on the invoice. We transfer ownership from the vendor to our company and post the journal. If you're thinking we don't know our true inventory levels with this process, you'd be right.

Regardless, are there any scenarios which may explain why our user may have been told to follow the process above? It totally seems counter-intuitive to have consignment work this way, or any inventory management work this way.

Thanks!

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André Arnaud de Cal... 299,078 Super User 2025 Season 2 on at

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Please help verify consignment process flow

Hi KBanh,

You are correct that your current process is not ideal. A few years ago, Microsoft added the option to support the consignment process. You can read more on Microsoft Learn and in a blog from Henrik Marx Larsen.

The goods will then be received in your warehouse, but with another Owner tracking dimension, until you transfer the ownership and ship the goods to your customer.

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

Working with Consignment Stock in Dynamics 365 Supply Chain Management – henrikmarx (wordpress.com)

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Hana Xue Microsoft Employee on at

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Please help verify consignment process flow

Hi KBanh,
About the consignment process:
First, the retailer manually creates a consignment replenishment order. (For a consignment replenishment order, you can view Consignment Inventory: Create Consignment Replenishment Order (instructorbrandon.com))
vendors should know how to deliver.
Once the inventory is delivered and arrives from the vendor to the retailer, the consignment replenishment order is updated.
The vendor can then monitor updates to the physical on-hand inventory.
use an Inventory Ownership Change Journal.
the vendor should monitor the consumption of the Products Received from Consignment Inventory Page.
Finally, payment is made to the vendor according to the used, consumed, or sold goods.
For more details, you can check the link below：
Understanding Inventory Consignment Process in Dynamics 365 (instructorbrandon.com)

Best Regards,
Hana

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bankk 6,603 on at

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Please help verify consignment process flow

Thank you Andre and Hana. I appreciate your confirmation of my understanding of this process, and thank you also for the added resources.

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