Scenario 10 — Consignment Procurement (Vendor Stock at Our Plant)
We ran this whole consignment cycle live on S/4HANA (DEV / client 250). The page's illustrative "Mughal Steel / 100 TO" story is reframed to a realistic iron-ore consignment using the real master data that already exists in the system — follow the codes below exactly; you can select every one.
- ✅ Real master data: consignment material
RM-IRON-01("Iron Ore Lump", type ROH) · vendorMUGHAL21(Mughal Steel Industries Ltd) · plantPK01· SLocFNGD· purch orgPKLO· company codePSPK. - ✅ Info record 5300079940 (ME11, category Consignment, ₨250,000/TO) · consignment PO 4500032784 (ME21, item category
K, 100 TO). - ✅ GR 101-K material doc 5000047743 — 100 TO into vendor consignment stock, no accounting document (still the vendor's) · consumption 201-K material doc 4900423475 — 20 TO withdrawn → consignment liability created.
- ✅ MRKO settlement doc 3600000010 (₨5,000,000) → F-53 payment 4900000005 — MUGHAL21 paid, cycle closed.
- 🔧 3 system settings this scenario needs (all set & verified live — see Prerequisites): G/L
169900in PSPK · doc typeREreference-number optional (OBA7) · aKONSconsignment-settlement output record (MRM1) — this last one is what lets MRKO post.
📊 Business Case — When & Why You Use This
Consignment is a special procurement model where a vendor parks their own stock at your site, but the goods stay the vendor's property until you actually withdraw and consume them. You only create a payable at the moment of consumption — not at receipt. It's the classic "use it, then pay for it" arrangement, and Pakistani textile and construction businesses lean on it heavily for high-volume raw materials.
🕐 When to use it
When a supplier agrees to stage material at your plant or DC and bill you only for what you draw — common for iron ore, fasteners, packaging, and other fast-moving raw materials you want on hand without tying up cash.
❓ Why it matters
It frees up working capital: stock is available immediately but you carry no liability and no expense until you consume it. Cash flow improves because payment is deferred to actual usage, settled periodically via MRKO.
👤 Who triggers it
Purchasing sets up the consignment info record and arranges delivery; the storekeeper receives special stock K; production/maintenance consume it; accounts payable run the periodic MRKO settlement.
🔁 The key distinction
The vendor owns the stock until you withdraw it. Goods receipt creates no liability — the payable is born only at consumption (and paid only at MRKO settlement). Until then you hold the vendor's goods on your shelf at zero cost.
💰 Financial Impact — The Easy-Money Example
Mughal Steel places 100 TO of iron ore (₨250,000/TO) at PakSteel's Karachi plant on consignment. Watch when the money actually moves — the receipt is a non-event, and liability only appears the moment iron ore is withdrawn:
The big idea: with consignment, receiving stock is financially silent — no expense, no payable. The liability is created only at consumption (201-K), and it's only converted into a payable invoice at the periodic MRKO run. That deferral is exactly why consignment improves cash flow versus buying outright.
🇵🇰 The Business Story
🎯 What you'll learn
- Special Stock K — "vendor consignment stock" at our location
- Item Category K on PO (or special info record category)
- No invoice at GR — the liability arises only when you consume (mvt 201-K) and is billed via MRKO
- Liability only created at consumption — improves cash flow
- Stock visible in MMBE under "Vendor Consignment" column
- Your org structure (company code, plant, purch org = your buying team) is already built — Setup Guide.
- The consignment material
RM-IRON-01exists — Material Master. - The consignment vendor (Mughal Steel) exists as a Business Partner (BP = the vendor's record) — BP Guide.
- A consignment info record (the vendor's saved price) — you make it in step 10.1 below.
- Goods movements (MIGO 101-K receipt, 201-K use) can post — Stock-Readiness Checklist.
RM-IRON-01 ("Iron Ore Lump", type ROH — raw material) already exists at plant PK01, so nothing to create here. First time creating a material? the why behind every field.
📋 Prerequisites — what must be in the system (and why)
Before the consignment flow will run, three kinds of things must be in place: the right master data, two small company-code settings, and one output setting. For each one below you get: what to enter, why the scenario needs it, how to set it, and how you'll know it's right. We confirmed every one on our live IDES — so this is the real, tested list, not theory.
① Master data — the codes the steps use
On our system these already existed. If yours is missing any, create/extend it first — the "✅ Before you start" box above has the how-to links.
| What must exist | Value (your code) | Why the scenario needs it |
|---|---|---|
| Consignment material | RM-IRON-01 — "Iron Ore Lump", type ROH, base unit TO, at plant PK01 | The raw material the vendor stages on consignment. It must exist in PK01's plant view so stock can be received and consumed there. Without it: the goods receipt / consumption cannot find the material at PK01. |
| Consignment vendor | MUGHAL21 (Mughal Steel Industries) — extended to purch org PKLO and company code PSPK (recon acct 160000) | The supplier who owns the parked stock and is settled by MRKO. Needs the purch-org view (to order under PKLO) and the company-code view (so a payable can post). Without it: you can't create the PO, or the settlement can't book the payable. |
| Consignment info record | you create it in step 10.1 (ME11, category Consignment, ₨250,000/TO) — ours is 5300079940 | The price source. A consignment PO carries no price — SAP values every withdrawal and the MRKO settlement from this record. Without it: the 201-K withdrawal has no price to value the stock. |
② Setting: G/L account 169900 must exist in company code PSPK
What it is: 169900 "Payables from consignment warehouse" is the G/L "bucket" that holds the vendor's consignment liability between consumption and settlement.
Why the scenario needs it: the 201-K withdrawal (step 10.4) posts Dr Consumption / Cr 169900. If this account isn't set up in your company code, the withdrawal cannot post at all.
How to set it: FS00 → account 169900, company code PSPK → "With Template" → copy from company code 0001 (the chart-level data already exists; you are only adding the company-code view) → Save.
✅ How you'll know it's right: the 201-K consumption posts without the message "G/L account 169900 does not exist in company code PSPK".
③ Setting: document type RE must allow a blank Reference
What it is: MRKO creates its settlement invoice using FI document type RE. A document type can be told to require certain fields when a document is entered — one of those is the Reference number.
Why the scenario needs it: MRKO posts automatically and does not fill a reference. So if RE demands one, the settlement can't post — the reference must be optional for RE.
How to set it: OBA7 → document type RE → Details → under "Required during document entry" make sure Reference Number is unticked → Save.
✅ How you'll know it's right: MRKO no longer stops asking for a Reference. (People entering a manual MIRO can still type a reference — it's simply no longer compulsory.)
④ Setting: a consignment-settlement output record (KONS) must exist
What it is: when MRKO settles, it works out an output message (the settlement document to send the vendor) using output type KONS. For that it needs an output condition record that says how to issue the message.
Why the scenario needs it: with no KONS record, MRKO reports "no message was found for partner" and — on this system — the whole settlement quietly cancels itself (nothing is settled, nothing becomes payable). A KONS record is therefore compulsory for MRKO to finish.
How to set it: MRM1 → output type KONS → key combination "CoCde" → new row: Company Code PSPK, partner function LF, partner MUGHAL21, medium 1 (Print), dispatch time 4 → Communication → output device LP01 → Save.
✅ How you'll know it's right: re-run MRKO and the log says "Document created" (instead of "no message found"), and the vendor payable then shows up in FBL1N.
🔧 Step-by-Step
| Step | T-code | What it does | Why this step exists |
|---|---|---|---|
| 10.1 | ME11 | Save the vendor's "use first, pay later" consignment price (₨250,000/TO) | every withdrawal needs a saved price to value it |
| 10.2 | ME21 (item cat K) | Consignment PO — order 100 TO iron ore from Mughal Steel | the vendor needs an order telling them what to stage |
| 10.3 | MIGO 101-K | Receive 100 TO onto your shelf as vendor K stock (no FI doc) | goods arrive, but nothing is owed yet |
| 10.4 | MIGO 201-K | Withdraw 20 TO — expense posts, debt to vendor is born | you only pay for what you use |
| 10.5 | MRKO | SAP itself creates the invoice from the withdrawals | used goods must be billed — no MIRO in consignment |
| 10.6 | F-53 | Pay ₨5,000,000 — vendor cleared, bank goes down | a purchase isn't finished until the vendor is paid |
📦 Master Data
10.1 — Create Consignment Info Record · ME11
⚡ This step will: save the vendor's "use first, pay later" price — the price SAP will use to value every withdrawal later. No goods move and nothing is owed yet. 📄 paper: consignment info record (master data) · 📦 stock: no change · 💰 money: no posting
Do: ME11 → fill the first screen → pick Info Category: Consignment → enter the price → Save.
An info record = the vendor's saved price page: "this vendor sells this material at this price." Like a phone contact — name → number; here vendor + material → price. The consignment category is a separate page of that contact: the price for "use first, pay later" goods.
| Field | Fill | What the field asks (plain words) | Why we choose this — and the impact if wrong |
|---|---|---|---|
| Vendor | MUGHAL21 (Mughal Steel) | WHO parks the goods at your site? | The vendor who owns the consignment stock. Impact: this is half the key SAP searches on for the price; the wrong vendor means the withdrawal in 10.3 finds no price to value the iron ore |
| Material | RM-IRON-01 | WHAT do they park? | The iron ore being held on consignment. Impact: the other half of the search key — a wrong material leaves the withdrawal unpriced |
| Purch Org | PKLO | WHICH buying team is this deal for? | Prices are held per purchasing organization. Impact: if it does not match the org that consumes the stock, the price is not found |
| Plant | PK01 | WHICH site is this deal for? | Another plant could hold its own price with the same vendor. Impact: the wrong plant means PK01's withdrawals have no price |
| Info Category | Consignment (option 2 on the selection screen) | Which KIND of deal is this price for? Standard = normal buying (pay after receipt) · Consignment = vendor-owned stock (pay at use) | Consignment, because you only pay when you consume, not when the iron ore arrives. Impact: pick "Standard" and the consignment withdrawal (10.3) finds no price, so it cannot value the ₨250,000/TO cost |
| Net Price | 250,000 PKR/TO | What will you owe PER TO at the moment you CONSUME? | Nothing is owed at receipt — this price is used later, at withdrawal (10.3) and settlement (10.4). Impact: a wrong rate mis-values every consumption; e.g. 20 TO should post exactly 20 × ₨250,000 = ₨5,000,000 |
| Validity (from–to) | start → end date of the deal | From WHEN to WHEN is this price true? | A price change later becomes a new validity period; the old one stays as history. Impact: consume on a date outside the validity window and SAP finds no valid price for that day |
This info record is the price source MRKO uses to value every withdrawal — without it, the settlement has no price. Next we place the consignment PO (10.2).
🔄 Transaction Flow
10.2 — Create the consignment PO · ME21 · item category K
⚡ This step will: place a purchase order that tells the vendor what to stage on consignment. The magic is item category K — it marks the line as "vendor consignment", so the goods receipt lands as vendor-owned K stock and the PO carries no price (the price lives in the info record from 10.1, used only at withdrawal). 📄 paper: purchase order · 📦 stock: no change · 💰 money: no posting
Do (our live run): ME21 → vendor MUGHAL21, purch org PKLO, doc type NB → on the item set item category K, material RM-IRON-01, qty 100 TO, plant PK01 → Save. Live PO 4500032784.
| Where on screen · Field | Fill | What it is · why · what breaks without it |
|---|---|---|
| Item · Item category | K (Consignment) | What it is: the flag that turns an ordinary PO line into a consignment line. Why: it makes the GR post as vendor-owned K stock and suppresses the PO price. Without it: a normal line would create a GR/IR liability at receipt — exactly what consignment avoids. |
| Item · Net price | — (leave blank) | Why: a consignment PO carries no price; the value comes from the info record (10.1) at settlement. Without it: a price typed here is ignored — the info record wins. |
| Item · Material / Qty / Plant | RM-IRON-01 · 100 TO · PK01 | What / how much / where the vendor should stage. Impact: the GR in 10.3 copies these straight from the PO. |
✅ How you'll know it worked: the PO saves with item category K and no price. (Alternative: consignment stock can also be filled without a PO via MIGO "Other" mvt 561-K — but the PO route is the standard "consignment procurement".)
10.3 — Receive consignment stock · MIGO mvt 101 against the PO (Special Stock K)
⚡ This step will: put the vendor's 100 TO on your shelf as special stock K — you can see them in MMBE, but they are still Mughal Steel's property, so no money posts. 📄 paper: material document only (no accounting document) · 📦 stock: ↑ vendor-consignment (K) at PK01 · 💰 money: no posting
Do: MIGO → Goods Receipt → reference Purchase Order 4500032784 → set the storage location on the Where tab → tick Item OK → Post. Live GR material doc 5000047743 (mvt 101 K).
The MIGO screen has 3 zones — know them and every field finds itself: ① the top bar (the Action + Reference dropdowns and the movement-type box), ② the header tabs (General/Vendor: dates, delivery note), ③ the item area = the overview grid (one row per line) + the item-detail tabs below it (Material · Quantity · Where — plant, storage location and the special-stock indicator sit here · Partner — the consignment vendor sits here · Account Assignment).
| Where on screen · Field | Fill | What the field asks (plain words) | Why we choose this — and the impact if wrong |
|---|---|---|---|
| Top bar · Reference | Purchase Order 4500032784 | Receiving against WHAT document? | The consignment PO (item cat K) from 10.2 — it brings the material, quantity and the K special-stock indicator with it, so you type almost nothing. Impact: the K flag makes this receipt vendor-owned stock with no FI posting. |
| Top bar · Movement type | 101 | WHY is stock moving? A movement type is a reason code for every stock move | 101 = goods coming IN. Impact: the wrong code books the wrong kind of movement; only a receipt (101) raises the on-hand consignment quantity |
| Item grid · Material | RM-IRON-01 | What arrived? | The iron ore being received on consignment. Impact: the wrong material raises stock for the wrong item |
| Item grid · Qty | 100 TO | How much arrived? | 100 TO parked at your site. Impact: the count must match what physically arrived, or your consignment stock figure is wrong from the start |
| Item detail → Where tab · Plant | PK01 | WHERE will it sit — which site? | The receiving plant. Impact: the wrong plant stores the vendor's iron ore at the wrong site |
| Item detail → Where tab · SLoc | FNGD | Which exact store room inside that site? | The storage location within PK01. Impact: a wrong store room only misplaces the iron ore within the right plant |
| Item detail → Where tab · Special Stock Indicator | K (Vendor Consignment) | WHOSE property is this on your shelf? Blank = yours · K = still the vendor's. Like a friend parking his motorcycle in your garage — it stands there, but it is not yours | The K is what keeps these iron ore off your books until you use them. Impact: leave it blank and SAP treats the 100 TO as YOUR purchased stock — it would post a liability now, defeating the whole "pay only when used" point of consignment |
| Item detail → Partner tab · Vendor | MUGHAL21 | WHICH vendor owns it? | K-stock is tracked per vendor, so Mughal Steel's iron ore stay separate from any other vendor's parked stock. Impact: the wrong vendor mixes up whose stock is whose and later bills the wrong supplier at settlement |
FI effect: NONE. No expense, no liability. Stock visible only as "vendor consignment" in MMBE. Money-wise this receipt is silent — that is the whole point of consignment.
10.4 — Consume consignment stock · mvt 201-K (consumption with K)
⚡ This step will: make the iron ore yours the moment you take them: 20 TO leave the vendor's parked stock, the expense hits the cost center, and the debt to Mughal Steel is born. 📄 paper: material + accounting document · 📦 stock: ↓ vendor-consignment (K) −20 TO · 💰 money: Dr Consumption / Cr Consignment Liability
Do: MIGO → Goods Issue → fill the line → Post. This withdrawal is the money moment of the whole scenario.
Same MIGO 3 zones as 10.2: ① the top bar (Action = Goods Issue + the movement-type box), ② the header tabs (dates), ③ the item area = the overview grid + the item-detail tabs — the special-stock indicator sits on the Where tab, the consignment vendor on the Partner tab, and the cost center on the Account Assignment tab.
| Where on screen · Field | Fill | What the field asks (plain words) | Why we choose this — and the impact if wrong |
|---|---|---|---|
| Top bar · Movement type | 201 | WHY is stock leaving? | 201 = issue to a cost center — "a department took it for use." Impact: the wrong movement would not book the consumption against a budget, and consignment settlement later would have nothing to bill |
| Item detail → Where tab · Special Stock | K | Taking from WHAT kind of stock? | K = the vendor's parked (consignment) stock, not your own. Together with the vendor below, this makes the 201-K combination that triggers the pay-for-what-you-use posting. Impact: leave K off and SAP tries to issue from your own stock — of which you have none, so the posting fails or hits the wrong stock |
| Item detail → Partner tab · Vendor | MUGHAL21 | Taking from WHOSE parked stock? | Mughal Steel's iron ore. Impact: the wrong vendor draws down the wrong supplier's consignment and creates the liability against the wrong party |
| Item grid · Material | RM-IRON-01 | What are you withdrawing? | The iron ore being consumed. Impact: only the item you name here moves from vendor-owned to consumed |
| Item grid · Qty | 20 TO | How much do you withdraw? | Only what you withdraw becomes yours — and only this much becomes owed. Impact: 20 TO × ₨250,000 = ₨5,000,000 of liability; over-state the quantity and you owe Mughal Steel for iron ore you did not use |
| Item detail → Account Assignment tab · Cost Center | any (e.g., PKKHI-MAINT) | WHOSE budget pays for this? Like writing the department's name on the bill | A 201 always needs one, because consumption must land on someone's budget. Impact: no cost center = the posting is rejected; the wrong one charges the cost to the wrong department |
NOW liability is created:
| Consumption (P&L, auto-determined) | Dr 5,000,000 (20 × 250,000) | Cost Ctr PKKHI-PROD |
| Vendor Consignment Liability (169900) | Cr 5,000,000 | — |
In plain words: Dr (debit) on Consumption = expense goes up for that department. Cr (credit) on the liability account = "we now owe Mughal Steel this money." The price came from the info record (10.1): 20 TO × ₨250,000 = ₨5,000,000.
10.5 — Periodic settlement · MRKO
📄 paper: invoice document (SAP creates it — no MIRO) · 📦 stock: no change · 💰 money: Dr Consignment Liability / Cr Vendor
Monthly: settle the consignment liability into a normal vendor invoice for payment. Nobody types an invoice here — Execute makes SAP create the invoice document itself, from the withdrawals it already recorded in 10.3.
| Where on screen · Field | Fill | What the field asks (plain words) | Why we choose this — and the impact if wrong |
|---|---|---|---|
| Selection screen · Company Code | PSPK | Settle in WHICH company's books? | The legal company that will carry the vendor invoice. Impact: the wrong company code raises the bill in the wrong set of books |
| Selection screen · Vendor | MUGHAL21 | Settle WHOSE withdrawals? | Picks which vendor's consumption gets billed in this run. Impact: the wrong vendor would try to pay the wrong supplier for Mughal Steel's iron ore |
| Selection screen · Plant | PK01 | Settle withdrawals at WHICH site? | Limits the run to consumption at this plant. Impact: the wrong plant settles the wrong site's usage, or none at all |
| Selection screen · Settlement Period | this month | Withdrawals of WHICH period? | Everything consumed in the period is bundled into one invoice — one bill per month instead of one per withdrawal. Impact: the wrong period bills the wrong month's usage; miss a period and that consumption is never billed |
| Toolbar · Execute | — | What does pressing Execute do? | Creates an invoice document → the amount moves from "consignment liability" into normal AP (accounts payable = the list of vendor bills waiting to be paid). Impact: until you run this, the used iron ore sits as a consignment liability and Mughal Steel is never actually invoiced or paid |
What changes at this exact moment: pressing Execute makes SAP write a vendor invoice document itself — nobody types one. The ₨5,000,000 built up in 10.3 moves out of the consignment-liability tray into a normal payable you can pay.
| Vendor Consignment Liability (169900) | Dr 5,000,000 | the "we owe Mughal Steel" tray from 10.3 is emptied |
| Vendor MUGHAL21 (AP) | Cr 5,000,000 | now a real payable, waiting for payment |
In a normal purchase you enter the vendor's bill by hand in MIRO. Consignment is different: no bill is typed anywhere. MRKO reads the withdrawals it already recorded in 10.3 and creates the invoice for you. So the whole cycle here is Info record → 101-K receipt → 201-K withdrawal → MRKO — MIRO never appears.
Pay normally via F-53/F110.
Verify: MB54 → consignment stock report shows the drawn-down quantity · MMBE → RM-IRON-01 vendor-consignment column = 80 TO left · FBL1N → MUGHAL21 now shows the settled ₨5,000,000 as a normal open payable.
10.6 — Pay the vendor · F-53
⚡ This step will: pay the debt: the vendor's account clears and the bank shrinks by ₨5,000,000. 📄 paper: payment document · 📦 stock: no change · 💰 money: Dr Vendor / Cr Bank
Do: F-53 → fill the header (dates + company code) → Bank data (which cash account + how much) → Open Item Selection (the vendor) → Process Open Items → double-click the invoice so Not assigned = 0.00 → Post.
| Where on screen · Field | Fill | What it asks (plain words) | Why — and the impact if wrong |
|---|---|---|---|
| Header · Document Date / Posting Date | today (proposed) | When is the payment made / in which period does it post? | Same-day defaults are right. Impact: a wrong posting date can land in a closed period. |
| Header · Company Code | PSPK | WHOSE books release the cash? | PSPK owes Mughal Steel and pays. Impact: the wrong company code pays from the wrong firm's bank. |
| Bank data · G/L Account + Amount | 113100 · 5,000,000 | From WHICH cash account, and HOW MUCH leaves? | 113100 = Bank Main Account, the same bank G/L as Scenario 1; ₨5,000,000 is the payable MRKO created in 10.4. Impact: a wrong account credits the wrong cash line; a wrong amount leaves a balance that will not post. |
| Open Item Selection · Account (vendor) | MUGHAL21 (Mughal Steel) | WHOSE unpaid bills are we clearing? | The consignment vendor whose withdrawals MRKO turned into a normal payable in 10.4. Impact: the wrong vendor shows no matching open item. |
| Button · Process Open Items | click | Show this vendor's open (unpaid) invoices. | Opens the open-items list so you can pick the exact invoice. Impact: skip it and there is nothing selected to pay. |
| Open-items screen · the invoice line | double-click it → Not assigned = 0.00 | WHICH bill exactly are you paying? | Activating the line makes Assigned = Amount Entered, so Not assigned falls to 0. Impact: if it is not 0 the payment is unbalanced and will not post. |
| Toolbar · Post | save → payment doc number | Commit the payment? | Post writes the FI document and clears the invoice. Impact: nothing is real until you Post. |
What changes at this exact moment: the ₨5,000,000 leaves the bank and Mughal Steel's account goes to zero; the MRKO invoice's open item flips to CLEARED:
| Vendor payable (via MUGHAL21) | Dr 5,000,000 | the payable is cleared |
| Bank (113100) | Cr 5,000,000 | cash leaves the bank |
The payable here was born differently — no MIRO ever ran; MRKO (10.4) turned the consignment liability into a normal vendor payable to MUGHAL21. But once it is ordinary AP, paying it is the identical F-53 as any other vendor: Vendor Dr / Bank Cr, clearing the ₨5,000,000. That is the lesson — how a payable was created (MIRO or MRKO) does not change how you settle it.
Verify: FBL1N → MUGHAL21 → the settled invoice now shows as cleared, no open items left. Full F-53 walkthrough with every field: Scenario 1.
🐞 Errors we hit live — and how to fix them
These are the exact messages SAP showed while we ran this scenario, explained in plain words: what each one means, why it happens, and how to fix it. Learning to read these messages is half of becoming an SAP consultant — most "errors" are simply the system telling you a setting or an entry is missing. Where the fix is a setting, we link straight to the Prerequisite that covers it.
| Where it appears | The message SAP shows | What it means & why it happens | How to fix it |
|---|---|---|---|
| GR — 10.3 (MIGO 101-K) | "Enter Location" | The goods receipt needs a storage location (which store room the stock goes into) and the line didn't carry one yet. | On MIGO's Where tab, type storage location FNGD, then post. (Simple entry, not a config issue.) |
| Consume — 10.4 (MIGO 201-K) | "Enter a vendor for special stock K" | Consignment stock (special stock K) is tracked per vendor, so SAP must know whose parked stock you are drawing down. | On MIGO's Partner tab, enter the consignment vendor MUGHAL21. |
| Consume — 10.4 (MIGO 201-K) | "G/L account 169900 does not exist in company code PSPK" | The withdrawal wants to book the vendor liability to account 169900, but that account was never set up in this company code. | Create it — see Prerequisite ② (FS00, "With Template" from company code 0001). |
| Settlement — 10.5 (MRKO) | "For document type RE, an entry is required in field Reference" | MRKO builds its invoice as document type RE, which was set to demand a Reference number — but MRKO never supplies one. | Make the reference optional — see Prerequisite ③ (OBA7). |
| Settlement — 10.5 (MRKO) | "Consignment settlement: No message was found for partner MUGHAL21/company code" | MRKO tries to issue an output message to the vendor but finds no output record, so it cancels the whole settlement. The sneaky part: a document number flashes in the log, but nothing posts and the withdrawal stays "Not settled". | Create the KONS output record — see Prerequisite ④ (MRM1). |
| While doing Prerequisite ④ (MRM1) | "Device LOCL does not exist" | The output record's printer was set to LOCL, which isn't defined in this system. | Use a printer that exists — we used LP01. |
| Payment — 10.6 (F-53) | The ₨5,000,000 payable simply isn't there to pay | Not a red error — a symptom. If MRKO didn't truly post (because of the output message above), no payable was ever created, so F-53 has nothing to clear. | Fix the MRKO output first (Prerequisite ④), re-run MRKO until it says "Document created", then the payable appears for F-53. |
✅ Verification — Confirm Scenario 10 Worked
- MMBE → RM-IRON-01 → "Vendor Consignment" column shows 80 TO remaining
- MB54 → Consignment Stock report → see vendor's stock at our plant
🎓 Interview-Ready Answers
Q: When is a liability created in consignment procurement?
Not at goods receipt — receiving consignment stock (mvt 101 with special stock K) posts no FI document, because the goods are still the vendor's property. The liability is created only at consumption (mvt 201-K): the system debits a consumption account and credits a Vendor Consignment Liability account. That liability is then converted into a real payable at periodic MRKO settlement.
Q: What is special stock indicator K and how do you see it?
K is "vendor consignment" — stock physically at your plant but owned by the vendor and valued at the consignment info-record price. It's tracked per vendor, not in your own valuated stock, so it appears in the Vendor Consignment column of MMBE and in the consignment stock report MB54, not in your normal inventory G/L.
Q: What does MRKO do?
MRKO settles consignment (and pipeline) withdrawals for a period. It takes the accumulated consumption that posted against the consignment liability and creates a vendor invoice document, moving the balance from the consignment liability account into normal accounts payable so it can be paid via F-53 or F110.
Q: Why does consignment improve cash flow versus buying outright?
Because payment is deferred to actual usage. Buying outright creates a payable at goods receipt whether or not you use the material. Consignment lets you hold stock on your shelf at no cost, create a liability only when you consume, and pay only after the periodic MRKO settlement — so working capital isn't tied up in idle inventory.