Experts in e xtending Oracle e -Business Suite e nrich IT 1/16/2004VMI1 Vendor Managed Inventory...
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Transcript of Experts in e xtending Oracle e -Business Suite e nrich IT 1/16/2004VMI1 Vendor Managed Inventory...
1/16/2004 VMI 1
Experts in extending Oracle e-Business Suite
enrich IT
Vendor Managed Inventory (VMI)
Presenter: Arul Murugan, CPIM
1/16/2004 VMI 2
enrich ITAgenda
• 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
1/16/2004 VMI 3
enrich ITOverview on VMI
Vendor Managed Inventory (VMI) is a procurement and planning practice in which a company delegate’s key inventory management functions to one or more of its suppliers. Under this arrangement the supplier determines the items, quantities, and delivery schedules on behalf of the customer based on information it receives from the customer’s inventory and procurement systems.
Using VMI, manufacturers and distributors can anticipate customer needs and provide inventory more proactively than is possible using traditional procurement methods
This Presentation will address how VMI can be accomplished by using a single, well-integrated suite of applications ( Oracle )
1/16/2004 VMI 4
enrich ITPre-Requisites for VMI
• 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
1/16/2004 VMI 5
enrich ITOracle 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, POacknowledgement andchanges from Vendor
iSupplier Portal
Vendor uses portalto Acknowledge PO, Update Promise
date, View On-hand, Forecast,Replenish Inventory, View receipts ,
invoices, payments and otherinformation on-line
Publish On-hand, Forecast, PO and other data for VMI
Supplier Integration
OraclePurchasing
OracleInventory
Oracle OrderManagement
Oracle APS Instance
Oracle OLTP Instance
Publish On-hand, Forecast, PO
Load Vendor On-handas ASN
Data Collection
Existing modules need to be upgradedby applying the lattest 11.5.8 rollup
patch
Need to make configuration changes toenable VMI for selective items
Collection parameters need to bechanged to include user / Company
association
Collaborative planning is a newmodule within APS Suite that need to
be configured for VMI
Large suppliers can integrate to yourOracle system by sending EDI / XML
file for both inbound and outboundtransactions
iSupplier portal need to be installed andconfigured. It is integrated with
Collaborative planning and purchasingmodule
1/16/2004 VMI 6
enrich ITCollaborative 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 Portal
Supplier Portal
OracleAdvanced Planning
EngineExceptionsExceptions
1/16/2004 VMI 7
enrich ITVMI Configuration Steps
• Enable VMI at the ASL level (Item – Vendor 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 data
collection• Configure Planner Workbench to handle VMI exceptions by Planners• Optionally Configure to do ‘Auto Replenishment’ by checking ‘Allow
Automatic’ checkbox at ASL• Configure isupplier portal to be linked to Collaborative planning to
effectively use Supplier Collaboration
1/16/2004 VMI 8
enrich ITVMI Benefits
Benefit for the supplier: The ability to access customer on-hand quantity information, forecast
information, minimum and maximum inventory thresholds, in-transit inventory quantities and expected receipt dates in order to determine when to ship goods
The ability to manually execute an approved purchase requisition or blanket release on the customer system and to track the status of the order through receipt, storage, and consumption by the customer
The ability to automate replenishment proposalsBenefit for the customer: The ability to differentiate between goods that must be replenished by a
supplier from those which are internally planned and replenished The ability to consume VMI materials in Work-In-Process or to explicitly take
responsibility for planning from the supplier as needed The ability to better estimate suppliers production schedules based on
anticipated demand from the customer.
1/16/2004 VMI 9
enrich ITOption 1: Oracle VMI
View On-handBalances
Monitor On-hand Status
Is AvailableQty < MinThreshold
Create POfrom the
requistion
Run VMIReplenishment
Engine
Vendor / Buyercan release
planned orderinto 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
1/16/2004 VMI 10
enrich ITOption2: 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 orderinto 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 byVendor
No 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)
1/16/2004 VMI 11
enrich ITOption 3: VMI for version prior to 11.5.8
For Clients using Oracle applications version prior to 11.5.8 can implement VMI in one of the following ways by extending your Oracle e-business suite to support VMI
1. Create a Separate inventory Organization to stock and track Vendor inventory 2. 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
1/16/2004 VMI 12
enrich ITProfile
enrich IT:
enrich IT specializes in extending your Oracle E-Business suite with strong expertise in base application. Our unique model allows low cost implementation of quick hit projects for a fixed fee. Our normal implementation time frame is 3 to 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 is specializing in the implementation and upgrade of Oracle e-business suite. He has been a functional lead consultant / architect for about 8 years in implementing Oracle for manufacturing and service industry in the areas of Supply chain planning, Manufacturing, Distribution and CRM. Arul has done several successful full life cycle Oracle implementations and also extended the Oracle e-business suite for lot of clients after Go-Live.
1/16/2004 VMI 13
enrich ITContact Us
Arul Murugan, CPIM
enrich IT
Managing Principal Consultant
404-723-1405