Difference between VMI and collaboration with customer

[Former Member]

Hai,

I am trying to understand the difference between VMI and collaborative planning with customer(CPC)

Please correct me if I am wrong. In VMI, a vendor or manufacturer sells his material to customer and through EDI, the customer gives the information such as forecast, stock etc.

In CPC, the vendor and customer interchange information, such as demand, stock levels, promotions, delivery dates etc., based on ITS.

What is the difference between these two?

If I am not wrong, EDI is used for outside company communication andITS for within. So, can I say that VMI is for customer outside the company and CPC for internal customer?

Thank you.

[Former Member · Accepted solution]

Hi Visu

VMI is a part of SNP and a VMI account modelled as a customer in the supply chain can be used to receive information through EDI and hence help the manufacturer to automatically replenish based on a set of rules. This is more of a value added process offered by the Manufacturer and as partners dont get too much of a say in the customers planning process. There is visibility into the stock levels of the custemer and consumption pattern.

Collaborative planning as mentioned above is typically internet based but funtionally would mean collaboration on all logistic aspects of planning as well...right from design to forecasting to shipment ... it would be a tighter partnering and imho is a level above VMI.

[Former Member · Accepted solution]

Thanks Mohan and Harish,

Harish, can I say that I can use either VMI or collaborative planning for the same customer. I understand using both doesnot make any sense.

Thank you.

[Former Member · Accepted solution]

Hi,

In VMI scenario, Vendor is going to manage the Inventory.In Colloborative scenario, there is no "must" part of the information shared.

/Shibu

[Former Member · Accepted solution]

Hi Visu its just as shibu said.

if you use VMI its only to manage inventory and has more depth while if you use collaborative planinng it means a lot more partering in various other areas as well.

It depends on the vendors relation with the customer and how closely related the businesses are. if you are a Nuts and bolts manufacturer you may not necessarily be doing Collborative planning with General Motors but you sure might want to do VMI.

[Former Member · Accepted solution]

VMI module is implemented in order to best serve key clients of vendor. So, choice of client is crucial in VMI, whereas in collaborative plg such a choice is ignored. Generally, data relating to stock/forecast/purchase directly move to vendor's Apo sys in VMI and PIR is generated via DP and also released to SNP.

[former_member563406]

Hi Visu,

Service provided by a vendor for a customer, whereby the vendor plans material requirements in the customer's company. Vendor-managed inventory is only possible if the vendor has access to the customer's current stock and sales data.

In the ERP system, the following functions are available for vendor-managed inventory:

• Transfer of stock and sales data by EDI

• Receipt of stock and sales data by EDI

• Replenishment planning for customers

• Creation of a purchase order for an external EDI order acknowledgment

supply chain management tool that synchronizes demand signals and supply chain activities by utilizing Internet technology. Collaborative Planning enables supply chain partners to view, share and synchronize common information within the supply chain.

Hope this helps.

Regards,

Mohan

[former_member563406]

Hi Visu,

I think EDI is Automatic data transfer for Inbound/outbound to transfer times series and orders between APO and SAP r/3 or systems.

Internet Transaction Server (ITS) is like manual data transfer via browser interface like use of middleware technology for internet application.

Hope this helps.

Regards,

Mohan.