Consignment Agreement SAP: A comprehensive tool for effective consignment management

Consignment is a business model where a company sends its products to a third-party reseller, who then sells the products on behalf of the company. Consignment agreements are crucial in this model, as they define the terms and conditions of the consignment arrangement. SAP, the leading enterprise software company, offers a robust and comprehensive Consignment Agreement SAP tool to manage the consignment process effectively.

What is SAP Consignment?

SAP Consignment is a module in the SAP ERP system that manages the consignment process. It enables businesses to track consigned inventory, monitor sales, and create invoices for the products sold. SAP Consignment supports the consignment process for both the customer and the supplier sides. The module offers a range of features that help businesses manage consignment agreements in a streamlined and efficient manner.

Key features of SAP Consignment:

1. Consignment Fill-Up Order (CFU): This feature enables businesses to transfer their products to a third-party reseller for sale. The CFU process involves creating a sales order for the third-party reseller, who then receives the inventory for consignment.

2. Consignment Issue (CI): With this feature, the third-party reseller can request additional inventory to replenish their stock. This process involves creating a purchase order for the consignment inventory, which is then delivered to the reseller.

3. Consignment Pick-Up (CPU): The CPU feature enables businesses to retrieve unsold inventory from the third-party reseller. This process involves creating a delivery document, which initiates the return of the consignment inventory.

4. Consignment Settlement: This feature enables businesses to settle the payment terms with the third-party reseller for the products sold. SAP Consignment generates billing documents that the business can use to bill the third-party reseller for the products sold.

5. Consignment Stock Monitoring: This feature enables businesses to track their consigned inventory at the third-party reseller`s warehouse. The SAP Consignment module offers real-time inventory tracking, enabling businesses to monitor stock levels and prevent stockouts.

Benefits of SAP Consignment:

1. Enhanced visibility: With SAP Consignment, businesses can have real-time visibility into their consigned inventory, sales, and stock levels. This enables businesses to optimize their inventory management and prevent stockouts.

2. Streamlined consignment process: SAP Consignment automates the consignment process, from inventory transfer to settlement. This reduces manual errors and improves the efficiency of the consignment process.

3. Reduced costs: SAP Consignment enables businesses to optimize inventory levels, reduce inventory carrying costs, and prevent stockouts, resulting in significant cost savings.


Consignment Agreement SAP is a comprehensive tool that enables businesses to manage their consignment process efficiently. It offers a range of features that enable businesses to optimize their inventory management, reduce costs, and improve the efficiency of their consignment process. SAP Consignment is a valuable tool for businesses that rely on consignment arrangements as part of their business model. It provides a robust platform to manage consignment agreements and ensures that businesses can focus on their core activities without worrying about the complexities of consignment management.

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