Consignment is a functionality in MM-PUR wherein you purchase materials from the vendor on a consignment-basis. When the delivery comes, the materials, though will be stored in your warehouse, are still legally owned by the vendor until they are consumed, i.e. GI posting (this is the only time you will be liable to the vendor).

You just have to make sure, you set up the following to run this function perfectly:

1.  Maintain account determination

     KNO    G/L acct: GR/IR Clearing
     AKO    G/L acct: Inventory account

2.    Check field status compatibility at G/L account, posting keys in the IMG or run SE38/RM07CUFA to display fields compatibilities.

3.  Set up output condition type KONS.

4.  On the material master record, set special procurement indicator to 10 (consignment) at MRP2 view.

5.  Create Info record for the consigned material and vendor-consignor.  Be sure the info category is Consignment.

Related:

• What Is Outline and Scheduling Agreement
• Multiple Currency Quotation or Invoice From Vendor

SAP Material Management Books
SAP MM Books - Certification, Interview Questions and Configuration

SAP Materials Management Tips
SAP MM Configuration Tips and Materials Management Discussion Forum

Best regards,
SAP Basis, ABAP Programming and Other IMG Stuff
http://www.erpgreat.com