Processing Consignment Items Version

Contents

Overview

Consignment items are owned by the vendor who provides them, but are kept on site at a medical center. Consignment items are replenished as they are used -- "use one, order one." You pay for consignment items only when you use them.

You enter consignment items in the Item Catalog as stock items. Consignment items may be assigned to an asset location, although technically, they are not assets. Each consignment item must have a Minimum Stock Quantity and a Maximum Stock Quantity. Consignment items cannot have multiple units of measure.

When you add a new consignment item to the item catalog, Supply Chain creates an initial consignment purchase order for the item. No invoice is associated with the item, and no General Ledger transactions are created for receipt of the item for the initial PO.

When a consignment item is issued to a department, Supply Chain creates a new purchase order. The new PO has an Invoice Match Type of Invoice. An invoice is created for the consignment item, and the PO tells the vendor that the item needs to be replenished. General Ledger transactions are created for the issued item as follows:

• The Department expense account is debited.
• The PO Liability account is credited.

Only one vendor is allowed per consignment item. Note that you cannot create manual purchase orders for consignment items.

• Using "Bill Only" Requisitions and Purchase Orders may also be helpful reading.

Security

• Adding items to the item catalog is controlled by the role object "ItemAdd." The required setting for Consolidated Item Add is Create.
• The "Requisitions" role object controls access to requisition creation, display, copying, and editing.
  - For the Requisitions - All Depts list, the minimum setting is Create for users to create a requisition, copy a requisition, or submit a requisition for approval.

To access organization, department, or asset location data, the organization, department, or asset location must be included in a user's data profile.

Creating a consignment item

To create a consignment item in the item catalog, follow the normal procedure for creating an item. See Create an Item. Figure 1 and Figure 2 are examples of an Item Catalog edit panel for a new consignment item.

Figure 1 - General Tab for Creating an Item

Figure 2 - Defaults Tab for Creating an Item

• On the Consolidated Item Add Header, set the Item Type to Stock.
• On the General tab, set the Minimum Stock Quantity and Maximum Stock Quantity to the quantity that will be kept on hand.
  - Note: The Minimum Stock Quantity and Maximum Stock Quantity must have the same assigned quantity. Otherwise the record cannot be saved.
• On the Defaults tab, select Consignment.
• When you add an item to the catalog, you can designate the item as "patient chargeable," if appropriate. The system uses the item number as the patient charge number, by default, unless you specify a different number. You can enter a number in the Patient Charge Number (CDM) field on the Defaults tab.

A PO for the consignment item is automatically created when you enter the item in the catalog.

Note: Estimated sales taxes are not calculated on an initial consignment purchase order since this purchase order is "invoiceless." On the purchase orders that replace consignment items, estimated taxes are calculated.

To view the consignment item initial PO:

You can view the initial PO associated with a consignment item that you have made.

1. From the Materials Management main Contents, select Inventory > Item Inventory.
   The Item Inventory list appears.
2. Locate the item of interest using the filters and the Position To link.
   
3. Next to the item, click the i for inquiry, or Menu > Inquiry.
4. Click the PO History tab to view POs associated with the item. The PO created for the item is the earliest PO in the list, and corresponds to the creation date of the item. Figure 3 shows the PO information for the consignment item created above.

Figure 3 - Information About a PO Created for an Initial Consignment Item

To authorize the initial PO and receive the first consignment item:

Once you know the PO number, you can authorize the initial PO using the procedure outlined in To Authorize a PO. In short:

1. Determine the PO number using the process outlined above.
2. From the main Contents, select Purchasing > Purchase Orders (by PO) or Purchase Orders (by Create Date).
   The list of POs ordered by PO number or by create date (as you selected) appears.
3. Locate the PO.
4. Next to the PO, select Menu > Authorize PO.

A message appears asking you if you want to authorize the PO. A box on the message (Receive Consignment PO - All) asks if you want to receive the PO as well. Receiving the PO may be useful if the vendor has arrived and is making immediate delivery of the item. (Receipt can, however, be deferred to a later date.)

5. If you wish to receive the PO, select Receive Consignment PO - All.
6. Click Submit.
   The system returns to the Purchase Orders list.
   - Click Refresh to update information on the list for the PO you just received.

When you receive the initial PO, Supply Chain updates the on-hand quantity and transfers the price from the PO to the item vendor record. No GL transactions are created at this time.

Requisitioning consignment items

Requisitioning for consignment items follows the normal process described in To requisition a file item.

Supply Chain uses the price on the requisition from the item vendor record. Issues to a department are made at the consignment price (the price on the item vendor record). GL transactions are a debit to the department expense and a credit to the PO Liability account.

Consignment item replacement

When you requisition a consignment item and the requisition is released, the system automatically creates a purchase order to replace the item. Replacement consignment POs are billed by the vendor and have invoices, although the initial consignment PO for the item is invoiceless. Only replacement items are on a replacement consignment PO.

Note: The initial consignment PO and subsequent consignment POs are different. Supply Chain creates a replacement consignment PO when you requisition the item. If you try to create a consignment PO manually, you get an error message.

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