custom consigned vmi with customers

Oracle Quoting

White Paper

CUSTOM CONSIGNED VMI WITH CUSTOMERS

©2021 Jade Global Inc. All rights reserved

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Introduction

Business Requirements

Challenges Faced

Solution Scope

Solution Details

Solution Chosen

Design Architecture

Components Involved for Set up

Conclusion

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Table of Contents

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Introduction

1 | ©2021 Jade Global Inc. All rights reserved

This whitepaper describes the best practices of VMI (Vendor Managed Inventory) process, where the seller manages inventory on behalf of the customer.

VMI (Vendor Managed Inventory) Vendor managed inventory (VMI) is a well-known concept in the business-to-business market. The vendor is responsible for analyzing and optimizing inventory flow for each of their customers. The difference is mainly related to the transfer of ownership of goods. In VMI, the vendor retains the ownership even after the goods are shipped to the customer location; the transfer of ownership to the customer happens only when the customer consumes the inventory at the customer location.

When the inventory remains at customer location (VMI), customers send inventory reports of all the items to the vendor so that replenishment orders can be created based on forecast provided by customers.

Custom Consigned VMI With Customers

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Oracle Release 12 came with ASCP module, formerly known as Advance Supply Chain Process. ASCP module has a part called i-supplier, where granted supplier can monitor all the agreements, invoices, payments, etc. When the supplier wants to fill the stock, they can view the stock level in the i-supplier portal. If they observe that the stock levels will fall below the minimum quantity, they can create the releases online and deliver goods to inventory.

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Business Requirements


Currently, the vendor manages inventory for the customer, where the customer sends the sales forecast (830) file for two different ships to locations under the same customer account number. The quantity will be shipped through the IRISO process from the logistic location to the VMI location. The ownership of the material will be transferred when the customer sends a consumption notice, which will lead to the creation of a consumption Sales Order for the consumption notice.

The customer wants to set up multiple consigned Inventories (VMI) at their customer locations to replenish their forecast/demands based on specific business requirements.


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Challenges Faced


The client was facing below challenges:


The customer wanted the VMI consigned Inventory location to be treated as an internal location.

There can be multiple consigned INV for the same customer.

The customer does not want to define multiple INV locations.

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Solution Scope


1. Standard solution by Oracle:

In oracle standard solution, consigned INV is defined as an external location for e-Business Suite owner. Oracle provided below two flavors for VMI.


Un-consigned VMI with Customers: In this option, the customer owns inventory once received on the customer site. Here the inventory

shipped from the e-business suite owner to the customer via external sales order. This option allows invoicing of the customer by the

e-business suite owner at that point of "pay-on-receipt."

Consigned VMI with Customers: In this option, inventories ownership is retained by the e-business suite owner(the company that owns

and runs Oracle Collaborative Planning) until it is received on the customer site. The inventory ownership transfers to the customer, only

upon consumption by the customer at the customer site.

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2. Custom Solution:

In contradiction to the standard solution, we proposed a solution to consign INV as an internal location. This solution allows the

customers to send their Sales forecast (830) file for different VMI locations, where the quantity will be shipped through IRISO from

logistic to VMI location. It can then be consumed against a predefined blanket Sales agreement based on the customer's

consumption notice.

Jade Global identified the below solutions, which can achieve our objectives to consume quantity at different Sub-Inventory

locations for the same customer.

First, the customer will send their demand via 830-file.

A new holding Inventory organization (VMI) will be defined to hold all the VMI related Subinventories

A new ship-to-site will be defined for every VMI location.

A new Sub-Inventory and internal ship-to location will be defined and linked to the ship-to-site, as explained in point (b).

We will create a new forecast in the planning module for every VMI location.

A new custom VMI planner OAF page for users to view the forecast and create IRISO is created.

A new Sales agreement will be created for each VMI location.

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Solution Details



The customer sends the forecast file in RN format (4A3) for the upcoming 52 weeks.

Axway (Our EDI Partner) converts this file into Oracle EDI format( 830) and moves it to an inbound server location. SOA picks it up and

transfers it to the Oracle application server inbound location.

The user will decide to create ISO based on the calculation performed as per the business logic.

The user can specify or overwrite the ISO qty suggested by the program.

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Solution Chosen



Custom Solutions were chosen to fulfill the business requirement through the following steps.

Step 1: Create a new Inventory Location.

Step 2: Create New SI under VMI Org.

Step 3: Create a new Site for the Customer account.

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Step 4: Trading Partner Set up for group


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Step 5: New lookup is defined to link EDI location with order type, Subinventory, etc.


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Step 6: Customer will send their forecast in the below 830 (Sales Forecast) File Format.


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Step 7: VMI screen for forecast calculation and creation of ISO. The above forecast will be converted into a tabular format as shown below:


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Step 8: Forecast designator creation through INV resp.

Step 9: Create a new forecast output and attached this in lookup DFF- XXLSC_EDI_830_CUST_FCST


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Step 10: Sales Agreement Set up for a new location.

[N]: OM>Sales Agreement> Sales Agreements


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Design Architecture


The below image provides a snapshot of different processes involved in this requirement:

SOA Interface


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Components Involved for Setup


Trading Partners: This EDI integration is developed for more than five trading partners.

Oracle EBS: Developed and designed PLSQL code for VMI at the Sub inventory level.

Oracle SOA B2B: Setup is required for all trading partners (includes document, agreement creation, and FTP listening channel).


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Conclusion


Jade’s successful implementation of the solution was able to cater to complex business requirements. The customer was able to navigate complexities like having multiple

VMI locations for a single customer and treating VMI org as an internal location. It also helped achieve the objective of having only one inventory org.

The customer successfully managed multiple consigned Inventories (VMI) at their customer locations to replenish their forecast/demands based on business requirements.


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About Jade Global


San Jose | Philadelphia | Toronto | Vienna | Pune | Hyderabad

Jade Global provides enterprise business application implementations, integrations, software product engineering, cloud services, technology advisory,

testing, and managed services across diverse industries. We are head quartered in San Jose, California with U.S. offices in Philadelphia and Los Angeles.

Jade Global is an Oracle Platinum Cloud Select partner, Salesforce Silver Partner, ServiceNow Silver partner, Boomi Elite Partner, Snowflake Select and

Microsoft Gold partner. We have additional strategic partnerships with NetSuite and AWS. Jade Global has been recognized as one of the fastest-growing

companies in North America by Inc. 5000 and was featured on the Fastest Growing Private Companies list in the Silicon Valley Business Journal.

For more information, please visit www.jadeglobal.com

www.jadeglobal.com [email protected]

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