Vendor-Managed Inventory

1. Vendor-Managed Inventory SAP Best Practices for Chemicals

2. Purpose, Benefits, and Key Process Steps • Purpose • The purpose of this document is to provide you a detail description of all steps comprised in the scenario Vendor-managed Inventory (VMI). It addresses the needs of end users. • Benefits • Customers can be provided with materials automatically after the stock information has been transferred electronically • In case of shortages at the stock level of the customer, the replenishment run creates sales orders automatically • The creation of the sales order triggers the creation of a purchase order on the customer side • Key Process Steps • Overview VMI Scenario • Transferring Stock and Sales Data (Simulation) • Creating Customer Forecast Data (Flexible Planning) • Copying Planning Version • Customer Replenishment Run • Processing VMI Sales Order (TAV)

3. Required SAP Applications and Company Roles • Required SAP Applications • SAP ECC 6.00 enhancement package 5 • Company Roles • Strategic Planner • Sales Administrator

4. Process Flow Diagram Vendor-Managed Inventory Strategic Planner Transfer Stock and Sales Data (Simulation) Creating Customer Forecast Data (Flexible Planning) Copying Planning Version Customer Replenishment Run Sales Administration Processing VMI Sales Order (TAV)

5. The VMI-scenario describes, how vendors can plan the material requirements in the customer’s company. Vendors can only offer this service if they have access to stock figures and sales data at the customer. The scenario covers the following flow: Transferring stock and sales data via EDI Receiving stock and sales data via EDI Planning replenishments for customers Create sales order for customer Optional: Generating purchase orders for an order acknowledgment received by EDI Optional: Entering the purchase order number in the sales order Business Background

6. Vendor Managed Inventory VMI - Overview VENDOR CUSTOMER Sending Sales and Stock Data using Standard IDoc PROACT Receiving Sales and Stock Data using Standard IDoc PROACT Forecast of Material using Flexible Planning Customer Replenishment Run Creating Sales Order Type ‘TAV’ Sending Order Confirmation Standard IDoc ORDRSP Receiving Standard IDoc ORDRSP and transfer to Purchase Order

7. Receiving stock and Sales data using EDI Send stock and sales Data via EDI Create purchase order for PO-acknowledgement received by EDI Plan replenishements for the customer Create sales order and transfer acknowledgement via EDI Business View Business Benefits Customer Vendor Business Benefits Automatic data creation to save time and cost Planning of customer replenishement is used for production process. PO-Office can use planning information for deeper supplier relationship Stock is always available for better customer satisfaction

8. Component View Vendor Customer Sales Order Purchasing Vendor Send stock/sales data Receive stock/ sales data Plan replenishment Create and transfer sales order Create purchase order Optional: Confirm PO number Optional: Enter PO number in sales order

9. Diagram Connection Legend <Function> Hardcopy / Document External to SAP Financial Actuals Business Activity / Event Budget Planning Unit Process Manual Process Process Reference Existing Version / Data Sub-Process Reference Process Decision System Pass/Fail Decision