VMI planning based on inventory levels

This topic describes how a VMI supplier can plan the supply for a customer based on the agreed minimum inventory level.

For an introduction to the various planning methods, refer to Planning methods (VMI).

General planning procedure

If the VMI planning is based on the agreed minimum inventory level, you do not send your customer confirmed-supply messages. The planning and the replenishment process are entirely based on the inventory levels at the customer's warehouse. If the inventory level drops below the effective minimum inventory level, the supplier supplies the customer. Optionally, you can also take a maximum inventory level into account.

Specification of the inventory level

You can use the following methods to determine the inventory level:

A fixed level specified in the item data.
A fixed level agreed between the supplier and customer.
A time-phased level, agreed between the supplier and customer.
A time-phased level, based on a forecast that the customer sends to the supplier.

For further details, refer to To specify the minimum and maximum inventory.

Parameter setting

To specify this planning method, define an appropriate terms and conditions agreement on the Terms and Conditions Line (tctrm1620m000) session's Planning tab.

Use the following settings:

Responsible for Supply Planning	=	Yes
Forecast received from Customer	=	Yes or No
Use Min-Max Inventory Levels	=	Minimum Levels, Maximum Levels, or Minimum and Maximum Levels
Confirm Supply	=	No
Replenishment Based On	=	Inventory Level
Planning Based On	=	Inventory Level

Note

If you set the Replenishment Based On field to Inventory Level, LN also sets the Planning Based On field to the fixed value of Inventory Level.