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HandSCMInternalTraining
--VMI&ConsignAndy.Lin
Sep,2008AgendaConsignStandardFunctionalities3VMIStandardFunctionalities2VMI&ConsignConcepts1VMI&ConsignCaseDiscussion4WhatisVMIVendorManagedInventory(VMI)isaprocurementandplanningpracticeinwhichacompanydelegateskeyinventorymanagementfunctionstooneormoreofitssuppliers.Underthisarrangementthesupplierdeterminestheitems,quantities,anddeliveryschedulesonbehalfofthecustomerbasedoninformationitreceivesfromthecustomer’sinventoryandprocurementsystems.UsingVMI,manufacturersanddistributorscananticipatecustomerneedsandprovideinventorymoreproactivelythanispossibleusingtraditionalprocurementmethods.WithVMI,companiesarerealizingincreasesinavailableworkingcapital,reducedinventoryholdingcosts,andultimatelyincreasedcustomersatisfactionandprofitability.WhatisconsignmentItemswillbedeliveredtothebuyingorganizationbutthesupplierwillnotsendaninvoice(andthusnopaymentwillbemade)untiltheitemshaveactuallybeenconsumed.ConsumptionnormallyoccurswhentheitemsareusedupinWIPoraresoldbythebuyingorganizationbutotherscenariosarepossible.WithConsignment,companiesreducedinventoryholdingcosts,increaseinventoryturnandultimatelyincreasedcustomersatisfactionandprofitability.AgendaConsignStandardFunctionalities3VMIStandardFunctionalities2VMI&ConsignConcepts1VMI&ConsignCaseDiscussion4VMIStandardProcessVMISetupPrerequisites--ProfilesFND:DebugLogEnabled:shouldbesettoNo(orNull).PO:AutomaticDocumentSourcing(IfsettoYes,thelatestblanplier/sitecombinationisalwaysusedirrrespectiveoftheblanketspecifiedintheASL)PO:ConvertRequisitionUOMtoSourceDocumentUOM(Yes)PO:ReleaseduringReqImpor(Yes)MSC:Configuration(APS&CP)MSC:CollaborativePlanningDefaultCalendar(NeedtorunBuildCollaborativePlanningCalendar)VMISetupPrerequisites—ItemMasterPurchasableitemDefaultListprice(0)MRPPlanedorMRP/DRPplanned(inordertoenableDataCollectionstopublishtheitemtoCollaborativePlanningandtoallowtheplannertoreviewthelongtermforecastonthePlannerWorkbench.)ReleaseTimeFence:settoDoNotRelease(Kanban)DefaultBuyerDefaultPlanner(mustlinktoavalidemployee)VMISetupPrerequisites—ASLCreateItemCreateSupplierCreateBPACreateASL:Releasemethod:AutomaticRelease/ReviewVMIEnabledAutomaticAllowedMin&MaxQtyVMISetupPrerequisites—ASLVMISetupPrerequisites—SupplierUserPath:PurchasingSU>SupplyBase>RegisterSupplierUserRegistersupplierusernameandemailaddress
VMISetupPrerequisites--DataCollectionDefineInstanceforyourorganizationPath:AdvancedPlanningSystem(APS)Administrator:Collections>OracleSystems>StandardCollectionVMIProcess—RunVMIReplenishmentEngineRunVMIReplenishmentEngineafterDataCollectionSuggesttoscheduleDataCollectionandVMIReplenishmentEngineSupplierSide—ViewNotificationsLoginwiththeusername:Andy.lin@/woshiViewNotificationsSupplierSide—MonitorVMIstatusSwitchtotheVMIpageandViewVMIinformationVerifythesuggestedreplenishmentquantitySupplierSide—RequestGoodsReleaserequisitiontocustomerCustomerSide—ScheduleRequisitionImportScheduletherequest:RequisitionImportCustomerSide—ReviewandApprovePOSystemautomaticallycreateanincompletePOrelease(ifyousetASLreleasemethodtoAutomaticrelease/review)SupplierSide—CreateASN-1Path:iSupplierPortalFullAccess>Shipments:ShipmentNoticesSupplierSide—CreateASN-2FillintheshipmentlineinformationSupplierSide—CreateASN-3FillintheshipmentheaderinformationandsubmitCustomerSide-ScheduleReceivingProcessorScheduleReceivingTransactionProcessortoimportASNCustomerSide—ManageShipmentsUsePurchasingSU>Receiving>ManageShipmentstoViewASNCustomerSide—ReceiveagainstASNYoucanuseASN#orContainer#orBarcodelabletodoreceiptCustomerSide—MonitorVMIOnhandUsePurchasingSU>Receiving>ManageShipmentstoViewASNCustomerSide—ReceiptDistributionTheVMIreceiptanddeliverydistributionarethesamewithnormalreceiptanddelivery.CustomerSide—PlanningTransferPlanningtransferisnotaninventorytransaction.itsimplychangestheplanningorganizationfromthesuppliersitetotheinternalorganizationinwhichthegoodsareheld.CustomerSide--VMIMaterialConsumptionVMImaterialsareconsumedonaFIFObasis.MovedgoodsaretransferredintoregularstockandarenolongervisibleassupplieronhandquantitiesviaCollaborativePlanning. AgendaConsignStandardFunctionalities3VMIStandardFunctionalities2VMI&ConsignConcepts1VMI&ConsignCaseDiscussion4ConsignSetupPrerequisites—ItemSetupNothingspecialhere,justmakesurethattheitemisstockableandpurchasable.ConsignSetupPrerequisites—ASLCreateBPASetupASLlinkwithBPAandchecktheconsignedflagConsignProcess—CreateStandardPOEventhoughwehavecreatedaBlanketAgreementasthesourcedocument,
consignmentrequiresaPO(andnotaRelease)tobeginthecycle.ConsignProcess—ReceivetheGoodsReceivethegoodsinthedestinationinventory:nodistributionscreatedforthisreceiptNodistributionforthisreceiptConsignProcess—TransfertoRegularConsignedstockisautomaticallyconvertedtoregularstockwhencertaininventorytransactionstakeplace(e.g.shipping).Thenormalreceivingaccountingtransactionshavebeencreatedoncethestockwastransferredtoregularstock.ConsignProcess—CreateConsumptionAdviceRunrequest:INVSU>Report>Transaction>CreateConsumptionAdvicetogenerateconsumptionadvice.ConsignProcess—AutoCreateInvoiceRunrequest:PurchasingSU>Request>PayOnReceiptAutoInvoicetoAutocreateinvoiceaccordingtoconsumptionadviceConsignProcess—MiscTransactionYoumayneedtousemiscellaneoustransactiontoadjusttheConsignInventoryConsignProcess—ReturntoVendor(1)Aslongasthereareplentyofconsigninventory,youcanreturngoodstovendor.Ifthereisnoenoughconsigninventory,youneedtotransferregularinventorytoconsign.ConsignProcess—ReturntoVendor(2)YoucandoreturntransactiononlyifthevendorownedonhandquantityisequaltoormorethanthereturnquantityAgendaConsignStandardFunctionalities3VMIStandardFunctionalities2VMI&ConsignConcepts1VMI&ConsignCaseDiscussion4IsMRPsuitableforVMIitems?MRPwillbalancethetotaldemandagainstthetotalsupply,includingboththeinternallyreplenishedstockandtheVMIstock.Ifthereisasuddenincreaseofdemand,thenMRPwillsuggesttoreleaseanon-VMIordertomeettheincreaseddemand.Mypointofview:IfyouwanttopublishMRPresulttosuppliers,pleaseusesupplierscheduleandISP;VMIisbasedonMIN-MAXplanninglogic.VMIitemsshouldnotplanedbyMRP.ButyoucanuseMRPasanassistantWillMin-MaxplanningconflictwithVMI?TraditionalMin-MaxonlyconsidertheinternalplanedstockwhileVMIonlyconsiderthesupplierplanedstock.SetitemlevelMin-Max=totalMinMax-totalsuppliermanagedMinMaxCanVMIbecombinedwithConsignmentVMIisaplanningmethod,involvesuppliersintomaterialplanning.ItisakindofCollaborativePlanning.Consignmentismoreafinancialpolicy.Thekeypointofconsignmentis‘PayonUse’.Itcanreducetheinventoryholdingcostandincreaseinventoryturn.Mypointofview:mostofconsignmentbusinessaresuitabletouseVMI(orcollaborativeplanning).WhatisConsignSolutionforSuppliersAsupplierusingtheOracleApplicationsinternallywillneedtoshipinventorybutnotbillthecustomeruntilconfirmationisreceivedthattheinventorywasconsumed.
Usetheshippingfeatureoftripstopplanning.IncaseofFOBpointbeingcustomerdestinationthenperformtheshipconfirmbutdonotclosethetripanddefertheinventoryinterface.Thi
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