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Vendor Managed Inventory

VMI integration and optimization from Retail EDI

Whether setting up scan-based trading with CVS, another retailer, or have a customer needing SMI participation on SAP Ariba, Retail EDI is here to support your efforts.

VMI can help shape supply chain improvements for many companies, including:

  • Reduced Inventory costs
  • Increased visibility
  • More predictable demand
  • Lower logistics costs
  • Improved customer service metrics

Retail EDI works with companies to optimize VMI operations. Enabling B2B messaging to support analytics from a common canonical means on-demand insight is available to support continual efficiency gains.

Retail EDI provides support for implementation and improvement projects across B2B messaging (EDI), agreements/rules, as well as analytics to support forecasting and replenishment.

  • Project management, adoption, and training
  • Automation and any-to-any data transformation (EDI)
  • Order & inventory management (OMS & IMS)

EDI for Vendor Managed Inventory (VMI)

Vendor Managed Inventory is commonly referred to as VMI.  Many of the efficiencies found in VMI result from the ability to share, automate and analyze data.  Therefore, the B2B data, and all the other values used benefit from automation.  Integration and open data sharing.  Historically that means exchanging information between buyers and sellers using EDI (Electronic Data Interchange) and VANs (Value Added Networks).

Many other technologies come into play, but to understand how to better take advantage of the data, consider the EDI documents commonly used in VMI today, and which your organization needs to support.

 

Functional  Message EDI ANSI ASC EDIFACT cXML
Sales Forecast Planning Schedule w/Release (830) DELFOR Product Activity Message
Purchase Order Purchase Order (850) / Grocery Order (875) ORDERS Purchase Requisition
Confirmation Purchase Order Confirmation (855) ORDRSP Confirmation Request
Shipment Advice Advanced Shipment Notification DESADV Shipment Notification
Product Activity Product Activity Data (852) SLRPT Product Activity Message
Invoicing Invoice (810) INVOIC Invoice

Transport

Method

VAN, AS2, SFTP,  HTTPS

The VMI EDI Transactions

VMI relationships  differ by industry, design, and there are quite a few documents which can be incorporated.  Commonly used documents also seen in VMI include Promotional Announcements (EDI 889), and Planning /Release (EDI 830) aren’t shown here, but are supported.

The Purchase Order – Retailers issue Purchase Orders to vendors as a means of officially requesting goods or services electronically.  In VMI, very commonly it’s not used in the B2B sense, however, many systems once it decides a replenishment needs to happen creates an order for internal use which may be used for the order confirmation, sales order, invoice and pick-list type reports and more.

Purchase Order Confirmation – This document is sent by a Supplier to the customer in response to an EDI 850.  The document conveys information such as; acceptance, freight, packing method and more optionally.  Transaction type and relationship requirements usually dictate the level of detail needed.

Shipment Advice – This is sent by suppliers.  Most will relate the ASN (Advanced Shipment Notification) to this message.  The ASN follows the EDI 855 (In ASNI ASC messaging parlance…), and specifically details how the order was packed, carrier (Seen this term: “SCAC”?), and other information.  Accurate and easy to understand shipments means to the extent possible – shipments with item level serialization.  This not only helps in downstream data management, but it also helps align the transaction with other documentation such as BOL, manifest (gov), GS1-128 (UCC-128) labels and more.

Invoice – This document is sent by a Supplier in response to an order, but normally after the shipment notification is sent.  They can be sent per store, per item, consolidated or not, etc.

Product Activity Data – This is sent by the Retailer. For most organizations in retail, the EDI 852 across VANs (Value Added Networks) is what supports most of this traffic.  It typically carries information on (Retailer’s) inventory and level of activity per item/store (including sometimes: damaged, transferred or other).

Additional content on B2B/EDI -centric VMI and collaborative replenishment processes


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Let’s talk about how we can help increase efficiencies for your organization.
  • Use the Retail EDI Value Added Network as your supply chain partner to manage the actual EDI e.g. Orders and ASNs etc. across retail and other EDI-based channels.
  • Use our advisory and integration services to deliver automation and insight to the rest of your supply chain.