The supplier consignment process in SAP requires specific master data and subsequent process steps. A mandatory prerequisite is the creation of a consignment purchasing info record. This master data record contains the price and conditions agreed upon with the supplier, which the system uses to valuate the material upon withdrawal. The core principle of consignment is that liability is incurred only when the material is consumed or withdrawn from stock, not when it is received. Consequently, a periodic settlement process must be executed to clear these liabilities with the supplier for the materials that have been used.

A. Create consignment storage locations: While creating a dedicated storage location for consignment stock is a common and recommended practice for organizational clarity, it is not a mandatory system prerequisite. Consignment stock is identified by a special stock indicator ('K'), not the storage location.

D. Settle liabilities resulting from consignment stock receipts: In the standard consignment process, no financial liability is created upon goods receipt. The material is recorded in inventory as non-valuated stock owned by the supplier. Liability is only generated upon withdrawal.

1. SAP Help Portal - Managing Special Stocks - Consignment: "For consignment materials

you must create a consignment info record." This document confirms the necessity of the consignment info record.

Source: SAP S/4HANA Documentation

"Consignment". (A specific URL is difficult as it's within the SAP Help Portal structure

but the path is typically: SAP S/4HANA -> Enterprise Business Applications -> Sourcing and Procurement -> Inventory Management and Physical Inventory (MM-IM) -> Managing Special Stocks -> Consignment).

2. SAP Help Portal - Consignment Settlement: "In consignment processing

the vendor makes material available to you... The material remains the property of the vendor until you withdraw it from the consignment stores. Only then does the vendor require payment. The liability to the vendor is created when the material is withdrawn

and the liability is settled at regular intervals..." This confirms that settlement occurs after withdrawal

not receipt.

Source: SAP S/4HANA Documentation

"Consignment Settlement". (Path: SAP S/4HANA -> Enterprise Business Applications -> Sourcing and Procurement -> Logistics Invoice Verification (MM-IV) -> Consignment Settlement).