By Bob Croce, SAP Experts
Vendor-Managed Inventory (VMI) helps vendors collaborate with customers using SAP ERP Central Component (SAP ECC), and SAP Advanced Planning & Optimization (SAP APO). Before you can use VMI, though, you need to correctly set up master data and configuration.
That’s where this new SCM Expert article, written by Manoj Ambardekar, Managing Consultant for IBM Canada, comes in. In the article, Ambardekar creates a business scenario where a major retailer called MJA Corporation (the customer) uses a legacy ERP system to track inventory.
MJA plans to execute the VMI process with ABC Limited (the vendor), a global company. ABC uses SAP SCM 7.0 for global planning and SAP ERP Central Component (SAP ECC) 6.0 for execution. In the article, Ambardekar focuses on the standard VMI process (not consignment VMI).
He writes that MJA uses EDI 852 (i.e., product activity da
ta) to send sales history and stock data from MJA to ABC. ABC has assigned plant number 1000 and a distribution center (DC) number 1100 in the supply chain network. (These numbers are externally chosen or internally generated. Ambardekar says that you can use whatever numbering you prefer.) You need to set up the material masters in plant 1000 and DC 1100 in SAP ECC so the sales orders can be created for replenishment. Additionally, you have to create the customer location—1000999 for MJA— in SAP Advanced Planning & Optimization (SAP APO) so the inventory data can be received by EDI 852 in SAP APO.
He further explains in the article the necessary steps to set up the master data, configuration, and technical parameters. He also details the following five steps to create VMI master data:
- Create locations in SAP ECC and SAP APO
- Create material masters in SAP ECC
- Set up Core Interface (CIF) in SAP ECC
- Extend VMI products at customer DC in SAP APO
- Create transportation lanes in SAP APO
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