| # Planning by supplier The customer retrieves components from stock that is owned and managed by themselves. The supplier is responsible for supply planning. Therefore, the supplier determines the stock levels in the warehouse, but does not remain the financial owner of the goods. The VMI warehouse is modeled as a regular warehouse in the customer's ERP system because they perform warehouse management. Furthermore, the customer is the owner of the goods. To enable adequate supply planning, the VMI warehouse is modeled as an administrative warehouse in the supplier's ERP system. The advantage for the supplier is that they can allocate goods to their customers at the latest moment, and enhance flexibility and reliability. Just as in the full VMI scenario, in this scenario supply planning is based on either minimum/maximum inventory level replenishment or more detailed supply planning, in which the supplier is required to commit themselves to the scheduled supply quantities. Step 1. Customer sends planned consumption to supplier Customer sends planned consumption to supplier Step 2. Supplier plans supply Supplier plans supply Step 3. Supplier replenishes the customer's stock The supplier replenishes the VMI warehouse as required. The customer registers the receipt of the goods in the VMI warehouse. To notify the supplier of the receipts, the customer sends RosettaNet-XML message Inventory Report/ Receipt to the supplier. This message triggers an inventory receipt to update the inventory levels in the supplier's administrative warehouses, which allows the supplier to adequately perform supply planning. Other means of communication are also used, in which case the receipts are manually entered in the customer's administrative warehouse and the supplier's administrative warehouse. The received quantities are inserted in the customer's purchase schedule for each supplier. Step 4. Supplier sends invoice to customer Because the customer owns the components on receipt, the supplier invoices the customer at regular intervals; self-billing by the customer is not practicable in this scenario. Step 5. Customer issues stock The customer issues components for production or sales, because the customer is responsible for warehouse management for the VMI warehouse. Step 6. Customer notifies supplier of issues The customer notifies the supplier of the stock issues by means of RosettaNet-XML message Distribute Inventory Report. The supplier needs this information to effectively perform supply planning. Step 7. Customer pays supplier The customer pays the supplier. Related topics Full VMI Overview of terms and conditions Overview of VMI business scenarios Inventory ownership in Warehouse Management |