VMI is a logistics concept for improving performance in the supply chain, where the supplier has access to the customer's inventory and demand data. In the form of consignment inventory, the supplier maintains a consignment warehouse at the customer's premises from which the customer's requirements are covered. The warehouse is usually located close to the customer or on the customer's premises.
Until removal and payment by the customer, the goods remain the property of the supplier. The responsibility for the supply of goods - i.e. inventory management and replenishment planning - is transferred to the supplier or to an external service agency (ESA). VMI is particularly suitable for goods that have a high consumption and/or high consumption value.
For the customer, VMI increases availability, preserves liquidity, saves storage costs and shortens delivery times. The supplier consolidates long-term customer loyalty with its customized delivery service.
The higher risk with VMI is borne by the supplier. This is because the supplier is responsible for providing his customer with the required material in the required quantity at the required time. If the supplier does not do this satisfactorily, this can disrupt the relationship with the customer or even lead to the termination of the contract. Poor planning can also result in excess inventory, which has financial disadvantages.
The IT-side mapping of VMI processes is not trivial. The supplier always needs accurate information about:
For the VMI concept to work for both sides, the following prerequisites are important:
Do you want to implement efficient VMI delivery processes in your company and thus derive maximum benefit from them? We look forward to advising you. Please feel free to call or e-mail us.
With SPEEDI VMI, suppliers stock the customer warehouse completely IT-supported and automated from SAP ERP or S/4HANA. The module calculates the optimal shipping quantity, schedules it automatically in SAP, and takes individual agreements into account regarding minimum or maximum stock level and range, forecast quantities and stock data.. SPEEDI VMI also takes into account the supplier's replenishment strategy.
SPEEDI ESA enables end-to-end ESA processing in SAP ERP or S/4HANA. The module maps all transaction types per EDIFACT INVRPT: the advances shipping notification from the supplier to the ESA as well as vice versa goods receipt, stock, damage, loss, or delivery messages (collective daily delivery note) from the ESA to the supplier. The necessary adjustments to additional requirements not covered by EDIFACT INVRPT can be made very easily via the configuration.
With SPEEDI Third Party, suppliers can carry out their third party process IT-supported and automated throughout SAP ERP or S/4HANA: from the incorporation of the third party delivery into the SD scheduling agreement to the forwarding of the delivery schedules to the third party supplier to the goods issue posting. Time-consuming manual steps are unnecessary.