Vendor Managed Inventory
Vendor Managed Inventory (VMI) is a commonly used term in companies that distribute products in the consumer goods and retail space. Often software vendors claim to support vendor managed inventory requirements simply through defining a separate ‘warehouse’ for inventory that is stored at the customer’s facilities. This answer however, only addresses part of the challenge that manufacturers and distributors face when trying to maintain vendor managed inventory programs.
The real challenge is managing the consumption and invoicing of inventory stored at the customer’s site. Advanced Distribution for Dynamics AX helps manage this process by enabling automatic control and transaction processing for transfer orders of VMI-products from the central distribution warehouse to VMI warehouse. Minimum stock level triggers demand from the VMI warehouse that automatically creates supply transfer orders from the distribution warehouse. Based on availability of product at the distribution warehouse, these replenishment orders can be automatically confirmed and processed.
Furthermore, it is not just this automated inventory and replenishment processing that is addressed by Advanced Distribution for Dynamics AX. Sales orders that correspond to consumption at the VMI warehouse are directly and automatically created from the stock counting transactions on the VMI warehouse. Once sales orders are created then automatic processing of invoices for vendor managed inventory can occur.
Tags: Advanced Distribution, Microsoft Dynamics AX, Vendor Managed Inventory, VMI
Jim Dart
Consulting Manager, Merit Solutions
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