Hand SCM Internal Training --VMI & Consign
Sep, 2008
1
Agenda
Consign Standard Functionalities
3
VMI Standard Functionalities
2
VMI & Consign Concepts
1
VMI & Consign Case Discussion
4
2
What is VMI
Vendor Managed Inventory (VMI) is a procurement and planning practice in which a company delegates 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.
With VMI, companies are realizing increases in available working capital, reduced inventory holding costs, and ultimately increased customer satisfaction and profitability.
3
What is consignment
Items will be delivered to the buying organization but the supplier will not send an invoice (and thus no payment will be made) until the items have actually been consumed.
Consumption normally occurs when the items are used up in WIP or are sold by the buying organization but other scenarios are possible.
With Consignment, companies reduced inventory holding costs, increase inventory turn and ultimately increased customer satisfaction and profitability.
4
Agenda
Consign Standard Functionalities
3
VMI Standard Functionalities
2
VMI & Consign Concepts
1
VMI & Consign Case Discussion
4
5
VMI Standard Process
6
VMI Setup Prerequisites--Profiles
FND: Debug Log Enabled: should be set to No (or Null).
PO: Automatic Document Sourcing(If set to Yes, the latest blanplier/site combination is always used irrrespective of the blanket specified in the ASL)
PO: Convert Requisition UOM to Source Document UOM (Yes)
PO: Release during ReqImpor (Yes)
MSC : Configuration (APS & CP)
MSC:
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