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purpose of this documentation is to describe the activities in the Consigned
Inventory for Consumption or Retail
business process, including the flow of documents and high level data
Any implementation method should be agreed upon by trading partners. It is the intent of this documentation to make interpretation of the models used for Consignment more consistent, so that implementations are based upon common practices.
This scenario describes a buyer-Managed Inventory process. The buyer is in possession of inventory owned by the seller. The Buyer reports consumption of inventory (usage) or sales or other transfer-of-ownership event to seller, which triggers transfer-of-ownership and billing/payment cycle; the buyer issues a release or order to trigger replenishment.
See also Consignment Base Model and Variations and Assumptions in the Supporting Documentation.
Overview (Use Case) Diagram Narration
Narration Overview (Use Case) Diagram
|1.||Pre-Order Model 2: The buyer and seller negotiate the terms for the consignment process and the related Blanket Purchase Orders. The pre-order process includes the establishment of pricing and a Terms and Conditions Agreement.|
|2.||Buyer issues release or order to seller per appropriate Blanket-Order based, non-SMI Replenishment Scenario.|
|3.||Seller transfers (ships) goods to consignment warehouse per appropriate Shipment Model. If a third-party warehouse is used, see Consignment Scenario 4 - Third-party Warehouse, Buyer-Contracted or Consignment Scenario 5 - Third-party Warehouse, Seller-Contracted.|
Inventory Management Model 1:
(Optional) Inventory is physically located at buyer’s facility. Buyer
performs inventory counts and reports to seller (scheduled, as-needed, or at
seller request). Seller may invoice for inventory shrinkage.
The buyer may also use the Inventory Report to report billable consumption of inventory. In that case, Step 5 below may not be required, but at least one of Step 4 or Step 5 is required.
The buyer reports the
There is more than one choice here because reporting an event that triggers transfer-of-ownership in a consignment process very often means using business message that
is already being exchanged, and may or may not require the addition of a
data element or two.
In this consignment scenario, reporting the transfer-of-ownership triggers billing but not trigger replenishment (see Step 2).
The following options are described in more detail in the supporting documentation:
|6.||Financial Scenario: Ownership transfers from seller to buyer per contractual terms. Seller invoices buyer or payment is triggered per appropriate Financial Model. Seller may also bill for inventory shrinkage per contractual terms.|
|7.||(Optional - not shown here) The buyer reports may report inventory adjustments, if applicable. See Inventory Management Model 10 or adjustments may be included in Inventory Reporting per Inventory Management Model 1 (Step 4).|
Last updated 24 February 2003