| Inventory ownership in Warehouse Management |  |
| When the ownership of an item changes, payment is due and invoicing is initiated. In traditional, non-VMI business scenarios, the ownership of an item changes from the supplier to the customer after the customer has received the item from the supplier. The customer must pay for the item on receipt of the goods. In various subcontracting scenarios, ownership will not change during any of the inbound or outbound warehousing processes. In such cases, the ownership is customer owned. For further information on subcontracting scenarios, see Overview of subcontracting. In vendor managed inventory (VMI) scenarios, the ownership can be consigned. If the ownership is consigned, the ownership change is either time based or consumption based. Consumption based The ownership changes if the customer issues the goods to sell them or to consume them. Time based The ownership changes some time after: The customer receives the goods. The last issue or receipt of the goods. If a supplier delivers various items to a customer, a separate agreement or separate legal requirements may apply to each type of item. For time-based ownership change, the period of time is laid down in the terms and conditions of the contract between the customer and the supplier. For further information, see: Consumption-based ownership change Time-based ownership change Terms and conditions Ownership behavior, that is, if or when the ownership of the goods changes from the supplier to the customer, is laid down in the contract between the business partners. The terms and conditions of the contracts can be defined by item, business partner, and/or warehouse. For more information, refer to Overview of terms and conditions in the User's Guide for Terms and Conditions (U9499A US). Ownership behavior is defined in the Payment field of the Order Terms and Conditions (tctrm1130m000) session and the Time-based Ownership Change after Receipt and Time-based Ownership Change after last Transaction fields of the Logistics Terms and Conditions (tctrm1140m000) session. The Warehouse Management package uses the terms and conditions settings to determine how to deal with ownership in warehouse handling. Note that the terminology used in the terms and conditions defined in Common differs from the Warehouse Management terminology:
Usage in Common | Usage in Warehouse Management
Pay on Receipt | Company owned
Pay on Use | Consigned
No Payment | Customer owned
Related topics Ownership registration setup in Warehousing Overview of VMI business scenarios |