Vendor Managed Inventory Overview

Vendor Managed Inventory (VMI) is a process whereby the vendor manages your inventory of selected products. VMI reduces the cost of inventory control by having the vendor assume more of the responsibility for maintaining optimal inventory levels at a branch or central distribution center (CDC).

In a VMI relationship you send the vendor an 852 Product Activity Data document, which contains sales quantities and inventory levels for items they supply to you. In return, the vendor sends you an 855 Purchase Order Acknowledgment (Inbound), from which your system creates an open purchase order.

For the system to handle vendor managed inventory, you must do the following:

Create a trading partner profile for which an 852 document is defined.

On the EDI Add'l Doc Info screen for the 855, do the following:

In the Initial Order Status field, select O to create an open order.
In the Use Partner's Pricing on VMI Orders field, enter Y to copy the line item pricing from the 855 to the purchase order.

Assign the vendor to whom you are sending the 852 and from whom you are receiving the 855 to this profile.
To designate an acceptable pricing variance for incoming 855s, complete the Allowed Pricing Variance% field on the Additional Vendor Information window.
Reserve a block of valid, unused Eclipse purchase order numbers for the vendor to assign to the purchase orders they create. For example, you might reserve all the numbers that begin with 9, starting with P9000001.
Flag products as vendor managed inventory.