VMI Process in Oracle

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    Experts in extending Oracle e-Business Suite

    enrichIT

    1/16/2004 VMI 1

    Vendor Managed Inventory (VMI)

    Presenter: Arul Murugan, CPIM

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    Agenda

    Overview about VMI

    Pre-requisites for Oracle VMI

    Oracle Architecture for VMI

    Collaborative Planning

    Configurations for VMI

    VMI Benefits

    Option 1: Standard VMI

    Option 2: VMI with consignment model

    Option 3: Track Vendor Inventory without Oracle VMI

    Q&A

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    Pre-Requisites forVMI

    Oracle Applications 11.5.8 or

    Oracle Applications 11i prior to 11.5.8 with Family pack H for the following modules

    Oracle Inventory

    Oracle Purchasing

    Oracle Planning (APS)

    Collaborative planning is installed and Configured

    iSupplier Portal integrated with Collaborative planning for Supplier Collaboration

    (Optional)

    For VMI with Consignment model following modules need to be at 11.5.9

    Oracle Inventory

    Oracle Purchasing

    Oracle Payables

    Cost Management

    Warehouse Management

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    Oracle Architecture for VMI

    ASCP

    Collectes data and Plans for all the items

    Collaborative Planning / Supplier Collaboration

    Run VMI Replenishment engine

    e-Commerce Gateway

    Send On-hand / Forecast

    / PO to Vendor

    Receive ASN, PO

    acknowledgement and

    changes from Vendor

    iSupplier Portal

    Vendor uses portalto Acknowledge PO, Update Promise

    date, View On-hand, Forecast,

    Replenish Inventory, View receipts ,

    invoices, payments and other

    information on-line

    Publish On-hand, Forecast, PO and other data for VMI

    Supplier Integration

    Oracle

    Purchasing

    Oracle

    Inventory

    Oracle Order

    Management

    Oracle APS Instance

    Oracle OLTP Instance

    Publish On-hand,Forecast, PO

    Load Vendor On-handas ASN

    Data Collection

    Existing modules need to be upgraded

    by applying the lattest 11.5.8 rollup

    patch

    Need to make configuration changes to

    enable VMI for selective items

    Collection parameters need to be

    changed to include user / Companyassociation

    Collaborative planning is a new

    module within APS Suite that need to

    be configured for VMI

    Large suppliers can integrate to your

    Oracle system by sending EDI / XML

    file for both inbound and outbound

    transactions

    iSupplier portal need to be installed and

    configured. It is integrated with

    Collaborative planning and purchasing

    module

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    Collaborative Planning

    Customer's ERP /

    Legacy System

    Customers Manufacturer / Distributor

    Supplier's ERP /

    Legacy System

    Suppliers

    Customer Forecat,

    Purchase Orders

    Revised Forecast,

    Change Orders

    AdvancedShipment notice

    Supply Commits

    Customer Forecat,

    Purchase Orders

    Revised Forecast,

    Change Orders

    AdvancedShipment notice

    Supply Commits

    Customer

    PortalSupplier

    Portal

    Oracle

    Advanced

    Planning

    EngineExceptionsExceptions

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    VMI Configuration Steps

    Enable VMI at the ASL level (ItemVendor Combination)

    Enter threshold values and other VMI related parameters at ASL level

    Setup VMI related profile options

    Run initial Data collection with complete refresh including user-company association

    Run VMI Replenishment Engine in Collaborative planning after datacollection

    Configure Planner Workbench to handle VMI exceptions by Planners

    Optionally Configure to do Auto Replenishment by checking AllowAutomatic checkbox at ASL

    Configure isupplier portal to be linked to Collaborative planning toeffectively use Supplier Collaboration

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    VMI Benefits

    Benefit for the supplier:

    The ability to access customer on-hand quantity information, forecastinformation, minimum and maximum inventory thresholds, in-transitinventory quantities and expected receipt dates in order to determine when toship goods

    The ability to manually execute an approved purchase requisition or blanketrelease on the customer system and to track the status of the order throughreceipt, storage, and consumption by the customer

    The ability to automate replenishment proposals

    Benefit for the customer:

    The ability to differentiate between goods that must be replenished by asupplier from those which are internally planned and replenished

    The ability to consume VMI materials in Work-In-Process or to explicitly takeresponsibility for planning from the supplier as needed

    The ability to better estimate suppliers production schedules based onanticipated demand from the customer.

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    Option 1: Oracle VMI

    View On-handBalances

    Monitor On-hand Status

    Is AvailableQty < MinThreshold

    Create POfrom the

    requistion

    Run VMIReplenishment

    Engine

    Vendor / Buyercan release

    planned order

    into Requistion

    VendorAuthorised to

    release ?

    Only Buyer canrelease planned

    orders intoRequistion

    Vendor Shipsthe inventory

    Vendors sendsASN throguh EDI

    Receive Ithegoods in your

    inventory

    Pick the materialfor a Sales Order

    Fullfill theSales order

    VMI Process Flow

    Monitor

    Replenish

    ReceiveGoods

    FullfillCustomerDemand

    Yes

    No

    Yes

    No

    Interface VendorASN into Oracle

    ( In-Transit )

    OwnerShiptransfers fromVendor to yourOrganization

    Oracle tracksVendor

    Inventoryseperately fromyour invetory by

    planningOrganizations

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    Option2: Oracle VMI with Consignment

    View On-handBalances

    Monitor On-hand Status

    Is AvailableQty < MinThreshold

    Create POfrom the

    requistion

    Run VMIReplenishment

    Engine

    Vendor / Buyercan release

    planned order

    into Requistion

    VendorAuthorised to

    release ?

    Only Buyer canrelease planned

    orders intoRequistion

    Vendor Shipsthe inventory

    Vendors sendsASN throguh EDI

    Receive Ithegoods in your

    inventory

    Pick thematerial for aSales Order

    Fullfill the Salesorder

    (Can configure totake ownership at

    point of sale)

    VMI Process Flow

    Monitor

    VendorReplenishment

    ReceiveGoods

    FullfillCustomerDemand

    Yes

    No

    Yes

    No

    Interface VendorASN into Oracle

    ( In-Transit )

    System will not generate anyaccounting transactions.

    On-hand inventory will not bein our books. On-hand

    inventory will be tracked by

    VendorNo accrual takes place

    ** Requires 11.5.9 Upgrade

    System relives the invenotory fromVendor and book into your books(All accounting transactions take

    place at this point of timeOnly now accrual takes place and

    you are liable to pay vendor)

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    Option 3: VMI for version prior to 11.5.8

    For Clients using Oracle applications version prior to 11.5.8 canimplement VMI in one of the following ways by extending yourOracle e-business suite to support VMI

    1. Create a Separate inventory Organization to stock and

    track Vendor inventory2. Use ASN to track Vendor Inventory. As long as the

    inventory is managed by Vendor it will be considered

    as ASN In-Transit and when you want to consume the

    material receive the inventory against ASN into your inventory

    3. Load vendor on-hand as vendor Capacity for each item vendor

    combination in ASL. Optionally load on-hand as MPS entries as

    well with ATP option checked and production option unchecked.

    This will enable to promise customer orders against vendor

    inventory when ATP is performed in OM

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    Profile

    enrich IT:

    enrich IT specializes in extending your Oracle E-Business suite with strongexpertise in base application. Our unique model allows low cost implementationof quick hit projects for a fixed fee. Our normal implementation time frame is 3to 8 Weeks and we promise on-time delivery. We partner with you in developing

    Multi Generation Plan and executing in Quarterly / Monthly Releases

    Arul Murugan:

    Arul Murugan, CPIM is a Managing Principal Consultant with enrich IT and isspecializing in the implementation and upgrade of Oracle e-business suite. He

    has been a functional lead consultant / architect for about 8 years inimplementing Oracle for manufacturing and service industry in the areas ofSupply chain planning, Manufacturing, Distribution and CRM. Arul has doneseveral successful full life cycle Oracle implementations and also extended theOracle e-business suite for lot of clients after Go-Live.

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    Contact Us

    Arul Murugan, CPIM

    enrichIT

    Managing Principal Consultant

    404-723-1405

    [email protected]