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Administrator Guide
Last Updated: 2023-06-23
Setup Considerations: Consigned Inventory

Setup Considerations: Consigned Inventory

You can use this topic to help make decisions when planning your configuration and use of Consigned Inventory. It explains:
  • Why to set it up.
  • How it fits into the rest of Workday.
  • Downstream impacts and cross-product interactions.
  • Security requirements and business process configurations.
  • Questions and limitations to consider before implementation.

What It Is

Workday enables you to set up and hold goods in your inventory at zero cost when you have a consignment agreement with your vendors. Workday recognizes liability for the goods when they’re issued from inventory.
You can track those stocked consigned goods, and then create a bill and replace order to the supplier upon use.

Business Benefits

  • Suppliers own consigned goods until they’re used, improving your cash flow.
  • Consigned goods on-hand have zero value on your accounting books.
  • Workday enables you to account for the movement of consigned goods through your inventory.

Use Cases

Use Workday to request an initial supply of consigned inventory from a supplier, and capture the terms of the consigned agreement. You can:
  • Create a consignment supplier contract to capture items, quantities, and prices of consigned product.
  • Create a consignment requisition or purchase order for initial supply of consigned inventory at zero cost.
  • Track and account for consigned inventory.
Use Workday to create bill and replace purchase orders against consigned inventory usage transactions. Supplier invoice those purchase orders at the contract price. You’ll receive replacement goods against that same purchase order at zero cost:
  • You can view inventory transactions that are eligible for bill and replacement.
  • Once replaced, Workday marks consigned inventory usage transactions as paid so they aren’t in the next bill and replace replenishment.

Questions to Consider

Questions
Considerations
How do you separate your inventory.
All consignment inventory actions occur at the inventory site level.
You can configure your inventory sites, par locations, and stocking locations to receive consigned inventory.
How does Workday account for consigned goods?
  • Workday separates accounting entries for owned and consigned goods in inventory to distinguish consigned goods transactions from owned goods transactions.
  • You owe payment for consigned goods when you issue a usage transaction for those goods.
    Workday doesn't create accounting entries for consigned goods until those goods are included on a usage transaction.
How does Workday track consignment on purchase items?
Workday doesn't designate purchase items as consigned or nonconsigned. Consigned goods are any ordered and received using a purchase order with a
Consigned
 purchase order type.

Recommendations

We recommend that you set up your inventory sites, stocking locations, and supplier contracts, before creating any consignment transactions with your suppliers.

Requirements

  • Set up consignment contract types, purchase order types, and requisition types.
  • Set up inventory sites and stocking locations to store consigned goods.

Limitations

Consignment bill and replace purchase orders only generate from inventory usage transactions.

Tenant Setup

No impact.

Security

  • Set up the
    Process: Inventory
     domain in the Inventory functional area.
  • Set up the
    Manage: Inventory
     domain in th Inventory functional area to secure consigned usage requisitions.

Business Processes

No Impact.

Reporting

Report or Dashboard
Considerations
Consigned Goods on Hand
Use to view the consigned goods you have on hand and the estimated value of those goods.
Find Consigned Inventory Transactions
Use to display all consigned inventory transactions for an item, supplier, or both.

Integrations

All web services in the Supplier Accounts, Procurement, Inventory functional areas support consignment features that you can use to upload or retrieve data through an EIB.

Connections and Touchpoints

Features
Considerations
Purchase Order Types
  • Consignment purchase orders drive the consignment put-away process. Use consignment purchase orders for buyers to fulfill orders with consigned products.
  • Create a bill and replace purchase order type, which enables you to replace consumed consigned goods.
  • Workday only uses bill and replace purchase order types on transactions originating from inventory.
Requisition Types
  • Use consignment requisition types for requests that Workday fulfills with consignment products.
  • Create a bill and replace requisition type, which enables you to replace consumed consigned goods while paying for them.
  • You can only use bill and replace requisition types on transactions originating from inventory.
Supplier Contract Types
Workday supports consignment supplier contracts. These contracts need to be in place before issuing a consignment purchase order.
Supplier Portal
Suppliers can access consigned goods reporting in the supplier portal. To make consigned inventory reports available for your suppliers, add these reports to the Consigned Inventory dashboard. When there's no supplier contract pricing for a consignment transaction, Workday uses pricing setup on tabs on purchase item tasks.
Workday offers a Touchpoints Kit with resources to help you understand configuration relationships in your tenant. Learn more about the Workday Touchpoints Kit on Workday Community.