VMI Process in Oracle
Transcript of VMI Process in Oracle
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Experts in extending Oracle e-Business Suite
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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