Configuring the Vendor's SAP ERP System 
You use this process to make the settings in the vendor's SAP ERP system to enable you to implement a vendor-managed inventory scenario.
You create a material master record and a customer master record for each customer site and material that you want to replenish.
You enable integration between the vendor's SAP ERP and SAP APO systems by generating and activating integration models for the following:
Delivering plant, customer, material and customer material
Sales orders and stocks
Scheduling VMI sales orders (optional)
In Customizing, you assign the relevant sales area to the customer and the delivering plant. You can assign an order type (and in the case of a consigned VMI process, also a consignment sales document type) to the customer/plant combination, and you can also configure an automatic ATP check of TLB shipments. For more information, see Customizing for SAP ERP under .
You configure data exchange from the vendor's SAP ERP system to the customer's SAP ERP system.
If you want to reduce stock in transit in SAP APO using a proof of delivery, you configure the dispatch of a shipping notification to the customer's SAP ERP system. For more information, see VMI Stock in Transit in SAP APO.