Hi SAJID,
They sell medical consumable items and they want to supply them to their customers and bill them based on the consumption
This can be purely consignment. if the material is same as material sent to them, then use consignment pickup to get the material back. And material that are sold should have Consignment process in place.
they will take back in return which is different than what they have supplied on this consignment delivery
Practically, for these you can't include them in consignment. These to material need to be handled in different business process cycles
As you are more interested in settling out this with them, then better have Credit/Debit memo in place for these other Material to be settled against your material sent to then in consignment fill-up and that are open. And you can get those material in your system through non-PO GR.
Frankly, after going through your elaborated response, I don't think Job work or Subcontracting suits your process.
Thanks,
JP