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Consignment Stock Management in ERP: How to Track Stock You Don't Own

📅 January 03, 2026 ⏱ 7 min read ✍️ Bizvinc ERP Team
consignment stock ERP consignment inventory stock management
Warehouse Layout RACK A RACK B RACK C RACK D — LOW STOCK ⚠ Total SKUs 2,840 Value Rs 12.4M Supply Chain Status SUPPLIER Lead Time: 7 days OTD: 94% WAREHOUSE Utilization: 78% FEFO Active CUSTOMER OTD: 96.2% Fulfilled ✓ Critical Stock Levels Raw Material A 90% Packaging Material 50% Component B — Critical 20% ⚠ Finished Goods 80%

Consignment stock is legally complex and operationally challenging without ERP. The same physical shelf can contain stock owned by three different parties — ERP tracks each.

Inbound Consignment: Supplier Stock at Your Premises

Stock received on consignment from a supplier is not yours until used or sold. ERP must track consignment quantities separately, generate consumption advice notes, and reconcile with supplier statements.

Outbound Consignment: Your Stock at Customer Premises

Placing your stock at customer premises on consignment enables convenience without ownership transfer. ERP tracks every unit at every customer location, generates replenishment instructions, and invoices on consumption.

Consignment Reconciliation

Monthly reconciliation with both suppliers and customers ensures all parties agree on quantities and values. ERP generates automated reconciliation statements, reducing disputes.

Consignment Risk Management

Stock on consignment at customer premises is your financial exposure until sold. ERP tracks the total consignment exposure by customer and alerts when it exceeds approved limits.

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