The dynamics 365 is released with lots of new functionality but one of the important change that I will discuss here which Inbound Vendor Consignment Stock is in the earlier version it is handled through workaround. The concept of vendor manage inventory is that the inventory is owned by the vendor but store at your place and as you start the consumption the ownership of inventory is transferred to you and paid to the vendor that you have consumed. Normally in retail business it happen vendor place their inventory in the retail outlet showcase for sale. The respective vendor can also look into their stock by vendor collaboration process.

Here I will walk through the process that how to handle Inbound Vendor Consignment Stock in Dynamics 365.

Inventory Owner:

You need to setup the inventory owner, you can set one vendor or multiple vendor in the inventory owner basically you setup those vendor here from which you have the consignment stack transaction so when you add vendor your legal entity automatically comes and then you add the vendor. Here USMF is my legal entity and rest are consignment vendor.

Inventory management>setup>dimension>inventory owner


Tracking Dimension Group:

The item which is vendor managed it must have the owner tracking dimension.

Product information management>setup>dimension and variant group>tracking dimension group


Now create the released product that will be used in the consignment transaction. The item is created with owner dimension.



So far have we have setup the basic pre requisites for the execution of consignment replenishment order. This will allow you to create the replenishment order for the consignment so when you received the consignment the ownership is remain for the consigned vendor and no financial impact is created. Here is create the replenishment order and received the item.

Procurement and sourcing >consignment>consignment replenishment order











At this point the inventory is remain in the books of your vendor and no financial values is created in your company. You vendor can see the stock through vendor collaboration. With the passage of time consigned inventory is required so you need to create the inventory ownership journal in the inventory management. As you create the journal the ownership is transfer to the actual vendor and purchase order is created and financial values is created in your legal entity.

The ownership journal is setup in inventory management.

Inventory management>setup>journal>inventory



Now create the ownership journal. The process of journal creation is same as we create other inventory journal.

Inventory management>journal entries>item>inventory ownership change



Now transfer the owner of stock to the actual vendor on the journal line. When you post the journal it will create the purchase order for that vendor.




The status of purchase order that is created from the inventory ownership transfer journal.


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