Vendor Managed Inventory

Vendor managed inventory (VMI) is a supply chain initiative where the supplier is authorized to manage inventories of agreed-upon stock-keeping units at customer locations. Vendors can only offer this service if they have access to stock figures and sales data at the customer. 

A scenario describes how vendors can plan material requirements in the customer's company. 

1. Transferring stock and sales data via EDI
• The customer uses the message category PROACT to transfer the current stock as well as the historical sales data or the forecast sales data for a particular article to the vendor.
2. Receiving stock and sales data via EDI
• The sales data for the article is entered in an information structure in the information system S130 in the vendor system. The stock data is entered in the replenishment master data of the article.
3. Planning replenishments for customers
• Using the sales data, vendors can forecast future expected sales of the articles concerned at their customers’ sites. Alternatively, forecast values obtained from the customer can be used.
• Vendors first of all plan replenishments for the articles based on the current stock levels and any forecast values. The replenishment planning program calculates the requirement and generates a sales order as a follow-on document.
4. Sales order data is transferred to the customer by EDI in the form of an order acknowledgment. The EDI message category ORDRSP is used for this.
5. Generating purchase orders for an order acknowledgment received by EDI
• The order acknowledgment from the vendor is converted in the customer’s system to a purchase order. If a purchase order cannot be generated, because the data is incomplete, for example, the system triggers a workflow.
• If the order number should be transferred automatically to the vendor system after the purchase order has been generated, you have to enter the message variant VMI in the partner profile for the EDI message category ORDCHG.