Select language:

Process documentationConsignment VMI

 

You can use this process to implement a combination of customer consignment and vendor-managed inventory. In this scenario the vendor maintains and manages a stock of its products at the customer's site as vendor consignment stock and carries out replenishment planning on behalf of the customer.

Prerequisites

  • You have activated the business function Vendor-Managed Inventory (APO_VMI_CONS) in SAP ERP.

  • The vendor and the customer have made the required settings for vendor-managed inventory in their respective systems. For more information, see Settings for Vendor-Managed Inventory.

  • The vendor has defined the consignment sales document type to be used in the process in Customizing. For more information, see Customizing for SAP ERP under   Integration with Other mySAP.com Components  Advanced Planning and Optimization  Application-Specific Settings and Enhancements  Settings and Enhancements for Sales Orders  Settings for Vendor Managed Inventory (VMI)  Define Customer/Plant Assignment and Configure ATP Check  .

  • In the case of a process with a third party logistic provider as the special stock partner, the vendor has implemented the optional BAdI VMI Third Party Logistic Provider Scenario. This ensures a correct mapping of consignment stock to the relevant customer location.

  • The customer regularly provides the following information to the vendor:

    • Sales history

    • Promotion sales

    • Sales forecasts

    • Promotion sales forecasts

    • Withdrawal of material from the consignment stock

Process

  1. The customer sends original customer forecasts to the vendor.

  2. As an option, the vendor can process the forecast data in Customer Forecast Management, analyzing it and making the necessary adjustments before releasing it to Demand Planning. For more information, see Customer Forecast Management.

  3. The vendor generates planned independent requirements based on the sales forecasts and the customer's historical sales data using the statistical forecasting methods of Demand Planning. For more information, see Demand Planning.

  4. The vendor releases the planned independent requirements from Demand Planning to Supply Network Planning.

  5. Based on the demand plan, the vendor defines a short to medium-term plan to fulfill the demand quantities estimated, also taking into account the current consignment stock figures stored in the vendor's SAP ERP system as consignment stock. For more information, see Supply Network Planning.

  6. The vendor generates optimized distribution plans using the deployment function in SNP, also defining when and how the products available at the vendor's site are to be delivered to the VMI customers. For more information, see Deployment.

  7. The vendor groups the transport recommendations generated for individual products during deployment into TLB shipments of multiple products using Transport Load Builder (TLB). This ensures an optimal utilization of transport capacities. For more information, see Transport Load Builder.

  8. The vendor's SAP ERP system automatically creates a consignment fill-up order based on the shipments confirmed by the ATD (available-to-deploy quantity) check and generates an outbound delivery.

  9. The system transfers the sales order number to the vendor's SAP APO system during change transfer.

  10. The vendor's SAP APO system updates the TLB shipment as a VMI sales order, and the vendor creates a delivery for the sales order.

  11. The vendor posts a goods issue for the delivery in SAP ERP.

  12. In the SAP APO system, the vendor reduces the delivery and the stock at the ship-from location, and proceeds in either of the following ways:

    • Updates the consignment stock in SAP ERP and the stock at the customer location in SAP APO.

    • Updates the consignment stock in transit in SAP ERP and transfers it to the customer location in SAP APO. As soon as the stock is available at the consignment location, the vendor reduces the consignment stock in transit and increases the consignment stock in SAP ERP, also updating the relevant figures in SAP APO.

  13. When the customer sends information of withdrawing material from the consignment stock, the vendor creates a consignment issue order and an outbound delivery in SAP ERP.

  14. The vendor posts a goods issue in SAP ERP and issues an invoice for the customer.

  15. Accordingly, in SAP APO, the vendor reduces the consignment stock at the ship-to location.

This graphic is explained in the accompanying text.

Consignment VMI

More Information

For information about the standard (non-consigned) VMI process, see Standard VMI.

For information about the parallel use of a standard and a consigned VMI process, see Shipment Split in the VMI Scenario.