Known consignment inventory refers to stock that is physically held at a buyer’s location but remains the property of the supplier until it is consumed. This model reduces capital requirements for buyers and encourages higher inventory turnover. For suppliers, consignment inventory can improve visibility into product usage and enhance customer relationships. However, it also increases their inventory carrying responsibility, making data accuracy and trust essential. Advanced inventory systems track consignment inventory in real time, accounting for ownership changes upon consumption. They generate consumption-based billing and ensure accurate reconciliation between supplier and buyer records.
