Setting Up Vendor Managed Inventory

To set up VMI replenishment at the business unit level, use the BU Replenishment (IN_VMI_REPLN_BU) component. To set up VMI items at the business unit level, use the BU Item Replenishment (IN_VMI_RPLN_BUITEM) component.

To set up ship to information, use the Ship-To/Item Replenish (IN_VMI_RPLN_SHIPTO) component.

When setting up your system to manage stock at a customer location, you must:

Set up security for the VMI manager.
Define items by setID.
Create a VMI business unit.
Set up Ship To VMI options for the customer.
Set up Sold To options for the customer.
Define items for a VMI business unit.
Create storage locations for the VMI business unit.
Setup VMI Replenishment parameters.

Setting Up VMI Replenishment Parameters

VMI replenishment parameters can be set up at these levels:

The customer ship-to level.
The VMI business unit level.
The VMI business unit and item combination level.
The VMI business unit, item, and customer ship to level.

Replenishment parameters default from different places. They may be defined at the customer ship-to and item combination level. If they are not, this table illustrates the manner in which they will default:

Replenishment Attribute	Primary Default Source	Second Default Source	Third Default Source	Fourth Default Source
Replenish Class	VMI Ship-To Item Attributes	VMI BU Item Replenishment
Reorder Quantity Option	VMI Ship-To Item Attributes	Ship-To Customer	VMI BU Item Replenishment	VMI BU Replenishment
Stock-in Rate	VMI Ship-To Item Attributes	Ship-To Customer	VMI BU Item Replenishment	VMI BU Replenishment
Replenish Calculation Period	VMI Ship-To Item Attributes	Ship-To Customer	VMI BU Item Replenishment	VMI BU Replenishment
Reorder Point Range Checking	VMI Ship-To Item Attributes	Ship-To Customer	VMI BU Replenishment
Reorder Point Percent	VMI Ship-To Item Attributes	Ship-To Customer	VMI BU Replenishment
Reorder Point	VMI Ship-To Item Attributes	VMI BU Item Replenishment
Maximum Quantity	VMI Ship-To Item Attributes	VMI BU Item Replenishment
Replenish Lead Time	VMI Ship-To Item Attributes	VMI BU Item Replenishment
Reorder Quantity	VMI Ship-To Item Attributes	VMI BU Item Replenishment
Economic Order Quantity	VMI Ship-To Item Attributes	VMI BU Item Replenishment
Source Business Unit	VMI Ship-To Item Attributes	Ship-To Customer
Product ID	VMI Ship-To Item Attributes	VMI BU Item Replenishment	First record found in the PROD_ITEM table for the inventory business unit set ID
Unit or Measure	VMI Ship-To Item Attributes	VMI BU Item Replenishment	Default UOM for the product in the PROD_UOM table	Item Standard UOM

Pages Used to Set Up Vendor Managed Inventory

Page Name	Definition Name	Navigation	Usage
User Profiles - Roles	USER_ROLES	select PeopleTools, then select Security, then select User Profiles, then select User Profiles. Select the Roles Tab.	Used to assign the VMI Manager role to the user ID, which enables the user to access VMI components. PeopleTools : Security Administration
Define Item-General: Common	ITEM_DEFIN	select Items, then select Define Items and Attributes, then select Define Item	Used to define items at the setID level.
Business Unit Definition	BUS_UNIT_INV1	select Set Up Financials/Supply Chain, then select Business Unit Related, then select Inventory, then select Inventory Definition	Used to define a VMI business unit.
Ship To - VMI Options	CUST_SHIPTO_OPT2	select Customers, then select Customer Information, then select General Information. Select the Ship To Options tab, then select then select the VMI Options link.	Define VMI options for the ship to customer.
Sold To Options	CUST_SOLDTO_OPT	select Customers, then select Customer Information, then select General Information. Select the Sold To Options tab.	Define VMI options for the sold to customer.
Storage Areas	STORAGE_AREA_INV	select Inventory, then select Maintain Storage Locations, then select Storage Areas	Used to create storage areas for a VMI business unit.
Material Storage Locations	STOR_LOCATIONS_INV	select Inventory, then select Maintain Storage Locations, then select Material Storage Locations	Used to create storage locations for a VMI business unit, and associate the customer to the location.
Define Business Unit Item - General: Common	GEN_ATTRIB_INV	select Items, then select Define Items and Attributes, then select Define Business Unit Item.	Add a cost element and define VMI customers for the VMI business unit and item combination.
Material Storage Locations - VMI Ship To	IN_LOC_SHIP_TO_SP	select Inventory, then select Maintain Storage Locations, then select Material Storage Locations. Select the VMI Ship To link.	Used to define customer ship to locations for the business unit.
BU Replenishment	IN_VMI_RPLN_BU	select Inventory, then select Vendor Managed Inventory, then select Setup VMI Replenishment, then select BU Replenishment	Used to define replenishment parameters for a VMI business unit.
BU Item Replenishment	IN_VMI_RPLN_BUITEM	select Inventory, then select Vendor Managed Inventory, then select Setup VMI Replenishment, then select BU Item Replenishment	Used to define replenishment parameters for a VMI business unit and item combination.
Ship-To/Item Replenishment	IN_VMI_RPLN_SHIPTO	select Inventory, then select Vendor Managed Inventory, then select Setup VMI Replenishment, then select Ship-to/Item Replenishment	Used to define replenishment parameters for a VMI business unit, item, and customer ship to combination.

User Profiles - Roles Page

Use the User Profiles - Roles page (USER_ROLES) to used to assign the VMI Manager role to the user ID, which enables the user to access VMI components.

Navigation

select PeopleTools, then select Security, then select User Profiles, then select User Profiles. Select the Roles Tab.

Defining Items by SetID

To define items for VMI usage, access the Define Item-General: Common page (Items, Define Items and Attributes, Define Item).

In the Item Type group box, make sure that the Non-Owned Item and the Consigned Purchase check boxes are not selected.

Creating a VMI Business Unit

To create a VMI business unit that represents your customer site, access the Business Unit Definition page (Set Up Financials/Supply Chain, Business Unit Related, Inventory, Inventory Definition).

Select the VMI Stock check box to indicate that this business unit is supplier managed.

Note: The VMI business unit must have the same general ledger business unit as the supplying inventory business unit.

Ship To - VMI Options Page

To indicate that a customer ID is a VMI managed location, use the Customer Information (CUSTOMER_GENERAL) component. Use the Customer Ship To (CUSTOMER_SHIPTO_CI) component interface to load data into the tables for this component.

Use the Customer Ship To Options page to indicate that the customer accepts partial scheduled and partial orders so that the VMI manager can examine back ordered quantities.

Use the Ship To - VMI Options page (CUST_SHIPTO_OPT2) to define VMI options for the ship to customer.

Navigation

select Customers, then select Customer Information, then select General Information. Select the Ship To Options tab, then select then select the VMI Options link.

Image: Customer Ship To - VMI Options page

This example illustrates the fields and controls on the Customer Ship To - VMI Options page. You can find definitions for the fields and controls later on this page.

VMI Options

VMI Enabled Customer

Select to indicate that this customer ship to ID stocks consigned items and is used for VMI.

VMI Manager

Select the employee who is responsible for approving and overseeing orders generated for the VMI customer. This employee must have a role of VMI Manager.

Goods Consigned at Customer

Select to indicate that items shipped to this customer are not owned by the customer and are not paid for until they are consumed. This customer is not billed for items when the items are shipped. If selected, the four customer item tracking options; lot control, serial control, container control, and staged date control are automatically selected when you save the page. If not selected, the four customer item tracking options are not affected. This option also determines the Non-Owned option on the Material Storage Locations page.

Customer Order Defaults

Source Business Unit

Select the inventory business unit that is used when the VMI Replenishment process generates sales orders. This inventory business unit indicates the typical ship from location.

Customer PO Number

Enter the customer purchase order ID that is included on the sales order acknowledgement.

Customer Item Tracking

Select to indicate that lot, serial, container, and staged date information is maintained at the customer site. If selected, all transactions received from the customer will contain the item detail. If not selected, transactions received from the customer will not contain the item detail, and the items are depleted by using FIFO logic.

The options can not be updated if there is inventory on-hand or in-transit to the ship-to customer.

If any of the four customer item tracking options are selected, they are not grayed-out when you save. Instead, they are grayed-out the next time you access the page.

Replenishment Parameters

Indicate specific replenishment parameters that are used to calculate replenishment requests for VMI.

See Defining Replenishment Options.

Sold To Options Page

To set up customer sold to VMI options, use the Customer Information (CUSTOMER_GENERAL) component. Use the Customer Sold To (CUSTOMER_SOLDTO_CI) component interface to load data into the tables for this component.

Use the Sold To Options page (CUST_SOLDTO_OPT) to define VMI options for the sold to customer.

Navigation

select Customers, then select Customer Information, then select General Information. Select the Sold To Options tab.

Image: Sold To Options page

This example illustrates the fields and controls on the Sold To Options page. You can find definitions for the fields and controls later on this page.

VMI Order Consolidation

Select the option that determines how sales order requests, that are generated during the VMI Replenishment process, is grouped.

None: Select to instruct the VMI Replenishment process to generate a separate sales order for every replenishment request.

Ship To Customer: Select to instruct the VMI Replenishment process to combine all replenishment requests for the same ship to customer on the same sales order or material stock request.

Sold To Customer: Select to instruct the VMI Replenishment process to combine replenishment requests for the same sold to customer on the same sales order. This applies only to sales orders for non-consigned customers.

Receipt Verification

Select to indicate that the customer wishes to verify the receipt of items. If selected, the customer acknowledges the receipt of goods at their site. Shipments will appear as being in-transit until the receipt verification is received. If not selected, the customer does not acknowledge receipt, and the auto-putaway process is used to update on hand quantities for the VMI business unit.

Order Verification

Select to indicate that all sales orders created for this customer go on VMI hold. This provides the VMI manager to review the order before releasing it from hold.

Defining Items for a VMI Business Unit

To define items for a VMI business unit, access the Define Business Unit Item-General: Common page (Items, Define Items and Attributes, Define Business Unit Item). Add a cost element. The Non-Owned Item and Consigned Purchase options are not enabled.

Material Storage Locations - VMI Ship To Page

Use the Material Storage Locations - VMI Ship To page (IN_LOC_SHIP_TO_SP) to used to define customer ship to locations for the business unit.

Navigation

select Inventory, then select Maintain Storage Locations, then select Material Storage Locations. Select the VMI Ship To link.

Image: Material Storage Locations - VMI Ship To page

This example illustrates the fields and controls on the Material Storage Locations - VMI Ship To page. You can find definitions for the fields and controls later on this page.

Use the Material Storage Locations page to create storage location for the VMI business unit. Then use the Material Storage Locations - VMI Ship To page, to enter the VMI Order Management business unit, the VMI Ship To Customer identification code, the VMI Sold to Customer identification code, the Reorder Quantity Option, and the Desired Stock-In Probability.

Multiple customer ship to locations can be managed in one VMI business unit because the customer is associated to a material storage location. Therefore you can set up multiple MSLs within a VMI business unit; each MSL representing a customer site. If the customer site stores consigned and non-consigned items, you will need to create two storage locations and two customer ship-to values.

On the Material Storage Locations page, the Nettable, Non-Owned and WIP fields are not enabled. The Non-Owned field appears by default from the Goods Consigned at Customer option on the Customer: Ship To-VMI Options page.

Setting up Replenishment for Customer Ship-To

To set up VMI replenishment parameters for a customer ship-to, access the Customer Ship To - VMI Options page (Customers, Customer Information, General Information. Select the Ship To Options tab, then select the VMI Options link).

See Ship To - VMI Options Page.

BU Replenishment Page

Use the BU Replenishment page (IN_VMI_RPLN_BU) to used to define replenishment parameters for a VMI business unit.

Navigation

select Inventory, then select Vendor Managed Inventory, then select Setup VMI Replenishment, then select BU Replenishment

Image: BU Replenishment page

This example illustrates the fields and controls on the BU Replenishment page. You can find definitions for the fields and controls later on this page.

Reorder Quantity Option

Select how the VMI items are replenished for the VMI business unit. Options are EOQ, Min/Max, and Static Reorder Qty.

See Defining Replenishment Options.

BU Item Replenishment Page

Use the BU Item Replenishment page (IN_VMI_RPLN_BUITEM) to used to define replenishment parameters for a VMI business unit and item combination.

Navigation

select Inventory, then select Vendor Managed Inventory, then select Setup VMI Replenishment, then select BU Item Replenishment

Image: BU Item Replenishment page

This example illustrates the fields and controls on the BU Item Replenishment page. You can find definitions for the fields and controls later on this page.

All values on this page override setup on the BU Replenishment page.

Replenish Lead (Days)

This value represents the average number of days from the placement of a sales order or an MSR, to the receipt of the stock.

See Defining Replenishment Options.

Ship To / Item Replenishment Page

Use the Ship-To/Item Replenishment page (IN_VMI_RPLN_SHIPTO) to used to define replenishment parameters for a VMI business unit, item, and customer ship to combination.

Navigation

select Inventory, then select Vendor Managed Inventory, then select Setup VMI Replenishment, then select Ship-to/Item Replenishment

Image: Ship-To/Item Replenishment page

This example illustrates the fields and controls on the Ship-To/Item Replenishment page. You can find definitions for the fields and controls later on this page.

Replenish Lead (Days)

This value represents the average number of days from the placement of a sales order or an MSR, to the receipt of the stock. This default value comes from the BU Item Replenishment page.

The VMI Order Management business unit determines the setID that is used when selecting the Ship To Customer.

The Source Business Unit appears by default from the Customer Ship To setup page.

All values on this page, override setup on the BU Replenishment page and the BU Item Replenishment page.