3 Replies Latest reply on Mar 23, 2010 11:57 AM by gururaj

    VMI in Oracle

      Can anyone provide an overview of how vendor managed inventory (VMI) works in Oracle? Specifically, I am wondering if, when using VMI in Oracle, the vendor managing the inventory can replenish inventory by procuring items from suppliers other than themselves, or if the VMI capability assumes the vendor managing the inventory only replenishes inventory from its own company. Any insight into this, or how VMI works in general would be greatly appreciated! Thank you in advance for your time and assistance!
        • 1. Re: VMI in Oracle
          Kamal Shah

          Below note should give you more details on VMI in Oracle apps

          Vendor Managed Inventory:

          1.     It is procurement and planning practice in which a company delegate’s key inventories management functions to one or more of its suppliers.
          2.     Under this arrangement 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.
          3.     Using VMI, manufacturers and distributors can anticipate customer needs and provide inventory more proactively than is possible using traditional procurement methods.


          1)     VMI Supplier      can monitor current level of Inventory using Collaborative Planning module.
          2)     Supplier can see details like,
          a.     Forecasts
          b.     PO / ASN
          c.     On Hand Stock
          d.     In Transit Quantities
          e.     Open Requisitions
          3)     Supplier will request goods based on information he sees on portal.
          4)     This request will get automatically converted to PR and if required we can set it for auto creating a Purchase Order.
          5)     Customer will receive goods in normal process.

          Setup for VMI:
          1.     Enable VMI at Approved supplier list
          2.     Setup profiles for VMI enabling,
          a.     PO: Automatic Document Sourcing:
          b.     PO: Convert Requisition UOM to Source Document UOM
          3.     Run VMI Replenishment Engine via collaborative planning
          4.     Configuring isupplier portal to be linked to collaborative planning

          We can use VMI and consigned inventory model together, difference in business process will be from accounting side for payments of goods.
          In VMI, payments will be as normal as procure to pay cycle.
          In Consigned inventory, payment will be when material is actually consumed from store.


          Hope above info helps, if you need further assistance, do not hesitate to contact me !

          • 2. Re: VMI in Oracle
            Here wat do u mean by Customer?
            • 3. Re: VMI in Oracle
              Here Customer means whom you are shipping the materials via PO.

              i.e Item receiving organization.