VMI Vendor Managed Inventory

VMI (VENDOR MANAGED INVENTORY)

Whenever the inventory quantity falls we opt for planning methods to increase the quantity. But if we want to outsource our inventory management to our supplier so that once the quantity falls short of certain level the supplier would be creating the release then wither he approves it or we would be approving it, then the supplier would be delivering the goods. With the reference of the release we receive the goods at the receiving point (Receiving Department). Payment is made as soon as we receive the goods.

To do the above activities we have a portal known as “ISUPPLIER” whose access is given to the supplier for only those items which the supplier supplies.

In VMI inventory, vendor is going to have access to the ISUPPLIER portal from this portal the supplier will be able to see the blanket Purchase Agreement and the status of the stock level of the items. In VMI using the ISUPPLIERportal the supplier will be able to create the releases against BPA online and deliver the goods to our organization.

For the VMI supplier we privilege by making the payments once we receive the goods by enabling PAY ON RECEIPT option at the Sell Billing options in supplier form.

Below are the Setups to be defined:

Define the Planner

Navigate to SETUP->PLANNERS

Name: MM PLANNER

Employee: MM RAM

Then SAVE

Define an ITEM in the Inventory Responsibility

Switch to MM INV responsibility

Navigate to ITEMS->MASTER ITEMS

Organization: MM

Item: MMVMI

Desc: MMVMI

Under Inventory Tab

Enable (√) Inventory Item, Stockable options

Under Purchasing Tab

Enable (√) Purchasable Item, Use Approve Supplier options

Default Buyer: MM RAM

List Price: 50

Under General Tab

Planner: MM Planner

Make or Buy: Buy

Then SAVE

Create Approve Supplier List

Switch to Purchasing Responsibility

Navigate to SUPPLIER BASE->APPROVE SUPPLIER LIST

Type: Item

Item: MMVMI

Under key Attributes

Business: Direct

Supplier: MM SUPPLIER

OU: MM CARS

Status: APPROVED

Then SAVE

Now we create a Blanket Purchase Agreement

Navigate to PURCHASE ORDER-> PURCHASE ORDER

Type: Blanket Purchase Agreement

Supplier: MM SUPPIER

Amout Agreed: 50000

Lines:

Line Type Item Price
1 Goods mmvmi 50

Click on TERMS button

Give effective dates (start & end)

Amount Limit: 50000

Then SAVE and APPROVE the Blanket PO

Switch to Purchasing Responsibility

Navigate to SUPPLY BASE-> APPROVED SUPPLIER LIST

Organization: MM

Search for the ITEM: MMVMI

Click on ATTRIBUTES

Under Source Document Tab

Seq Type Number(PO NUMBER) Line
1 Blanket Purchase Agreement 7 1

 

Under Inventory Tab

(√) Enable VMI enabled

(√) Enable Automatic Allowed

Approval: Supply or Buyer                           (Both Supplier and Buyer can approve the Release/Requisition)

Buyer                                                                (Buyer can approve the Release/Requisition)

None                                                  (No approvals required)

Method: Min Max Quantities

Min Qty: 100

Max Qty: 500

Note: Only for VMI under the record details Global is NO as we don’t want our supplier to view the inventory of various inventory organizations

Now we define the Sourcing Rule or use the existing Sourcing rule

Navigate to SUPPLY BASE->SOURCING RULE

The Sourcing rule defined is MM SR

Now assign the sourcing rule to the default assignment or we can also create our own assignment set and assign the sourcing rule and then add our assigned sourcing rule to the profile option.

Navigate to SUPPLY BASE->ASSIGN SOURCING RULE

One can create a new assignment and assign the sourcing rule as below

Navigate to SUPPLIER BASE->ASSIGN SOURCING RULES

Assignment Set: MM ASR

Assignment

Assign To Item Type Sourcing Rule
Item/Global/Item-Org MMASL Sourcing Rule MM SR

Then SAVE

Else we can also assign our sourcing rule to the one already existing sourcing assignment say Scheduling Supplier

Search for Scheduling Supplier (Assignment Set)

Add:

Assign to Type Sourcing Rule/BOD
Intem-Org Sourcing Rule MM SR

 

Then SAVE

Now we need to set the SELL BILLING Option at the supplier level as PAY ON RECEIPT

Navigate to SUPPLIER BASE-> SUPPLIER

Search for the Supplier

Supplier Name: MM SUPP

Go to Purchasing Tab:

Pay On: Receipt

Invoice Summary Level: Receipt

Then SAVE

Now create a user for the Supplier:

Navigate to SUPPLIER BASE-> SUPPLIER USER MANAGEMENT->SUPPLIER USER CREATION-> REGISTER SUPPLIER USER

Supplier Name MM SUPPLIER
Supplier   Number 13
Email mmsupp@mm.net
Username Mmsupp
First Name Mm first
Last name Mm last
Job Desc MM job

 

Below would be the list of responsibility you would wish to grant the supplier

Here we can select all or only the selected responsibility

(√) Enable “isupplier Portal Full Access”

Click on REGISTER

Note: In R12 in supplier form where we can create a supplier and make the supplier as an ONLINE Supplier in contact details tab.

Now switch to System Administrator Responsibility

Here we need to assign a password for the user MMSUPP

Navigate to SECURITY->USER->DEFINE

Search for the user MMSUPP and assign the password

Now we also need to set the profile options at site level

Navigate to PROFILE->SYSTEMS

Search for the Profile: POS%

Under POS ENTERNAL LOGON PATH, POS EXTERNAL URL and also POS INTERNAL URL enter the application URL till the port number.

Note: If there is a problem with the isupplier in R12 just for our understanding and to know how the ISUPPLIER looks like to our user say MMUSER add the responsibility PLAN, SOURCE, PAY SUPPLIER VIEW

Now switch to the responsibility PLAN, SOURCE, PAY SUPPLIER VIEW

Else the responsibility PLAN, SOURCE, PAY SUPPLIER VIEW can be viewed from ISUPPLIER PORTAL

To access the ISUPPLIER portal we need to run the script located at

$POS_TOP/PATCH/115?SQL/POS_UPG_USR.sql

Now we will be able to open the page of ISUPPLIER and connect using the Login ID MMSUPP

This will open the ISUPPLIER page

Under the Planning click on ITEMS

Here we would be able to see the items that we need to order and also a release button will be enabled by clicking on this we can create the release. Generally this activity would be done by the supplier who has the access to raise the inventory level when it falls short.

But before the supplier is able to raise the Inventory we need to perform the below activities:

Add the responsibility ADVANCE PLANNING ADMISISTRATOR to the user MMUSER

Switch to ADVANCE PLANNING ADMISISTRATOR responsibility

Navigate to ADMIN->INSTANCES

The instance would be TST

Click on ORGANIZATION

Add the organization

Org Desc Type
MM MM INV ORG NONE

 

Then SAVE

Run the Program “PLANNING DATA COLLECTION PURGE STAGING TABLE” with the parameter for Validation as NO.

Navigate to COLLECTIONS->ORACLE SYSTEMS->STANDARD COLLECTION

Here they would be two programs

Planning ODS Data Pull

Planning ODS Load

Change the Parameters of User Company Association to Enable User Company Association

Then Submit the Programs

These two programs will be taking a long time complete as this would be taking in the snap shots of the inventory items and load it into ODS(OPEN DATA SOURCE) form the ODS the isupplier portal can access and the items which the supplier supplies can be viewed in the isupplier portal along with the stock details.

Once the two programs completes successfully

We need to run another program:

VMI REPLENISHMENT ENGINE this will enable the stock details in the isupplier portal.

We can now access the ISUPPLIER Portal and can check the Stock level of the Inventory and raise it whenever it falls short.

To summarize the setup required for VMI (ISUPPLIER Portal)

  1. Setup and define Planner
  2. Define an Item(Inventory Master Item)
  3. Create a Approve Supplier LIst
  4. Create a BPA(Blanket Purchase Agreement)
  5. Assign the BPA to the Approve Supplier List
  6. Define Sourcing Rule
  7. Assign the Sourcing rule to the Sourcing Assignment Set.
  8. Set the Sell Billing option at the Supplier level as PAY ON RECEIPT
  9. Create a User for the Supplier
  10. Define the password for the Supplier
  11. Enable instance for Advance Supplier Chain Planning
  12. Run the program “Planning data collection purge staging table” with the parameter for Validation as NO
  13. Later run 2 programs Planning ODS data pull and Planning ODS load
  14. Once the above two program completes run the Program VMI REPLENISHMENT ENGINE
  15. Run the script POS_UPG_USR.sql for loading ISUPPLIER Portal

 

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