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We can use this process to implement a standard vendor-managed inventory (VMI) scenario with an SAP ERP system and an SAP Advanced Planning and Optimization (APO) system for the vendor, and an SAP ERP system for the customer.

The purpose of this document is to provide us with a detailed description of all steps comprised in the scenario Vendor-Managed Inventory (VMI). This documentation addresses the needs of business users, for example, demand planners of an enterprise. We can also use this document as a reference if We want to test the VMI scenario in the SAP Best Practices demo environment. Finally, this document is also suitable as training material, as it guides us through the entire scenario.

This document primarily describes the characteristic steps that guide us through the Vendor-Managed Inventory scenario. For additional steps, such as capacity leveling or SNP optimization runs, which are more specific to Supply Network Planning, refer to the business process procedure of the Make-to-Stock scenario. To set up the user menu, We need to load the user role S24_02U.SAP and assign it to the user.

VMI collaboration is only possible if the customer material satisfies the requirements for warehouse-oriented replenishment planning. In particular, this means that the change in stock can be forecast with a comparatively high level of reliability and without major random fluctuations.

The data required for VMI planning is transmitted through Electronic Data Interchange (EDI) or extensible Markup Language (XML) messages and is stored persistently in SAP APO. The following data can be processed here:

  • Stock on hand
  • Sales history
  • Promotion sales
  • Sales forecast
  • Promotion sales forecast
  • Open purchase order quantities
  • Shortfall quantities

  We can also transfer the following data through EDI: 

  • Stock in transit
  • Proof of delivery

Data Required to Support VMI

  VMI customer locations modeled in APO

  Customer-level demand forecast, preferably produced by, or

At least validated by, the customer

  Customer inventory levels, either maintained by the supplier

Or provided daily by the customer using the EDI transaction

852, Product Activity Data

  Daily stock movements, provided daily by the customer

Using the EDI transaction 852, Product Activity Data

Process Flow

  1. 1.     The customer transfers stock and sales data via EDI from their system to my company’s SCM system (= the vendor’s system).
  2. 2.     My company

- Releases VMI forecast to SNP.
- Performs SNP run to generate planned transportation orders.
- Performs deployment run to generate recommended transportation orders.
- Performs TLB run to generate confirmed stock transport orders.

  1. 3.     In my company, SAP SCM transfers confirmed transportation orders into sales order (SAP ECC).
  2. 4.     My company transfers purchase order acknowledgements to the customer via EDI.
  3. 5.     The customer transfers a purchase order change notice containing the PO number back to my company.

In a productive system environment, the customer/retailer sends stock and sales information to my company / the supplier

The heuristic run processes the individual planning locations in sequence and determines the sourcing requirements. It matches all requirements that exist for a product at a location with the total demand for the period in question. The heuristic run then determines the valid sources of supply and the corresponding quantity based on the predefined percentages (quota arrangements) for each source of supply.

The following section describes how we can work with the SNP heuristics interactively. Alternatively, We can schedule the SNP heuristics in the background.