VMI business partner selection

This topic describes how LN selects a supplier in a vendor managed inventory (VMI) situation.

Some restrictions for the use of VMI functionality are also described.

Only a single VMI supplier can carry out your planning for an item at any single time. However, you can switch from one VMI supplier to another. LN searches for suppliers with terms and conditions agreements effective between the current date ('now') and the scenario finish date.

To select the effective VMI suppliers, the following rules apply:

  • If LN finds multiple valid VMI suppliers, LN sorts the suppliers according to the effective dates and expiry dates of their respective terms and conditions agreements.
  • If the effectivity period of one VMI supplier completely encloses the effectivity period of another VMI supplier, that other VMI supplier is ignored.
  • As soon as a valid supplier becomes effective, LN selects that supplier as the VMI supplier.

  • If, at a particular date, no supplier is effective as VMI supplier, no more VMI suppliers can be selected for later dates. For example, you cannot have a supplier carry out the planning in March, then use regular planning methods in April, and have the supplier carry out the planning again in May. If you try this, Enterprise Planning generates a signal and handles the second period (May in the example) by using the regular supply method.

    However, of the total period between the current date and the scenario finish date, you can use regular planning in the first part of the period, later, a VMI supplier can carry out the supply planning for a particular time, and in the last part of the period you can use regular planning again.

Multiple sourcing

Multiple sourcing is permitted, as long as no more than one of the suppliers is a VMI supplier.

If you use multiple sourcing, the order planning procedure generates requirements and distributes the requirements over the available sources in the usual way. The demand that is allocated to the VMI supplier results in forecast that is sent to the VMI supplier. The other demand results in planned purchase orders or planned distribution orders.

You can assign a priority to the various suppliers, but the VMI supplier always has priority 0, which is the highest priority.

To view all active VMI suppliers and regular suppliers for a plan item, take the following steps:

  1. Start the Items - Planning (cprpd1100m000) session.
  2. Select the plan item.
  3. Click appropriate menu > Product Structure > Active Suppliers by Plan Item.

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