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Vendor Managed Inventory (VMI)

Vendor Managed Inventory (VMI). Presenter: Arul Murugan, CPIM. Agenda. Overview about VMI Pre-requisites for Oracle VMI Oracle Architecture for VMI Collaborative Planning Configurations for VMI VMI Benefits Option 1: Standard VMI Option 2: VMI with consignment model

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Vendor Managed Inventory (VMI)

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  1. Vendor Managed Inventory (VMI) Presenter: Arul Murugan, CPIM VMI

  2. Agenda • Overview about VMI • Pre-requisites for Oracle VMI • Oracle Architecture for VMI • Collaborative Planning • Configurations for VMI • VMI Benefits • Option 1: Standard VMI • Option 2: VMI with consignment model • Option 3: Track Vendor Inventory without Oracle VMI • Q&A VMI

  3. Overview on VMI Vendor Managed Inventory (VMI) is a procurement and planning practice in which a company delegate’s key inventory management functions to one or more of its suppliers. Under this arrangement the supplier determines the items, quantities, and delivery schedules on behalf of the customer based on information it receives from the customer’s inventory and procurement systems. Using VMI, manufacturers and distributors can anticipate customer needs and provide inventory more proactively than is possible using traditional procurement methods This Presentation will address how VMI can be accomplished by using a single, well-integrated suite of applications ( Oracle ) VMI

  4. Pre-Requisites forVMI • Oracle Applications 11.5.8 or • Oracle Applications 11i prior to 11.5.8 with Family pack H for the following modules • Oracle Inventory • Oracle Purchasing • Oracle Planning (APS) • Collaborative planning is installed and Configured • iSupplier Portal integrated with Collaborative planning for Supplier Collaboration (Optional) • For VMI with Consignment model following modules need to be at 11.5.9 • Oracle Inventory • Oracle Purchasing • Oracle Payables • Cost Management • Warehouse Management VMI

  5. Oracle Architecture for VMI VMI

  6. Collaborative Planning VMI

  7. VMI Configuration Steps • Enable VMI at the ASL level (Item – Vendor Combination) • Enter threshold values and other VMI related parameters at ASL level • Setup VMI related profile options • Run initial Data collection with complete refresh including user-company association • Run VMI Replenishment Engine in Collaborative planning after data collection • Configure Planner Workbench to handle VMI exceptions by Planners • Optionally Configure to do ‘Auto Replenishment’ by checking ‘Allow Automatic’ checkbox at ASL • Configure isupplier portal to be linked to Collaborative planning to effectively use Supplier Collaboration VMI

  8. VMI Benefits Benefit for the supplier: • The ability to access customer on-hand quantity information, forecast information, minimum and maximum inventory thresholds, in-transit inventory quantities and expected receipt dates in order to determine when to ship goods • The ability to manually execute an approved purchase requisition or blanket release on the customer system and to track the status of the order through receipt, storage, and consumption by the customer • The ability to automate replenishment proposals Benefit for the customer: • The ability to differentiate between goods that must be replenished by a supplier from those which are internally planned and replenished • The ability to consume VMI materials in Work-In-Process or to explicitly take responsibility for planning from the supplier as needed • The ability to better estimate suppliers production schedules based on anticipated demand from the customer. VMI

  9. Option 1: Oracle VMI VMI

  10. Option2: Oracle VMI with Consignment VMI

  11. Option 3: VMI for version prior to 11.5.8 For Clients using Oracle applications version prior to 11.5.8 can implement VMI in one of the following ways by extending your Oracle e-business suite to support VMI 1. Create a Separate inventory Organization to stock and track Vendor inventory 2. Use ASN to track Vendor Inventory. As long as the inventory is managed by Vendor it will be considered as ASN In-Transit and when you want to consume the material receive the inventory against ASN into your inventory 3. Load vendor on-hand as vendor Capacity for each item vendor combination in ASL. Optionally load on-hand as MPS entries as well with ATP option checked and production option unchecked. This will enable to promise customer orders against vendor inventory when ATP is performed in OM VMI

  12. Profile enrich IT: enrich IT specializes in extending your Oracle E-Business suite with strong expertise in base application. Our unique model allows low cost implementation of quick hit projects for a fixed fee. Our normal implementation time frame is 3 to 8 Weeks and we promise on-time delivery. We partner with you in developing Multi Generation Plan and executing in Quarterly / Monthly Releases Arul Murugan: Arul Murugan, CPIM is a Managing Principal Consultant with enrich IT and is specializing in the implementation and upgrade of Oracle e-business suite. He has been a functional lead consultant / architect for about 8 years in implementing Oracle for manufacturing and service industry in the areas of Supply chain planning, Manufacturing, Distribution and CRM. Arul has done several successful full life cycle Oracle implementations and also extended the Oracle e-business suite for lot of clients after Go-Live. VMI

  13. Contact Us Arul Murugan, CPIM enrichIT Managing Principal Consultant 404-723-1405 Arul@enrichIT.com VMI

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