Efficient warehousing through vendor-managed inventory

Vendor-managed inventory (VMI) is an inventory management strategy in which suppliers assume responsibility for the customer's inventory management. The supplier monitors stocks, forecasts demand and ensures that stocks are replenished on time.

The use of this process in the context of Dynamics 365 Finance & SCM offers a number of advantages:

Improved inventory accuracy

By integrating VMI with Dynamics 365 Finance & SCM, suppliers and customers can exchange real-time data, resulting in more accurate inventory management and fewer stock-outs.

Reduced storage costs

Since the supplier is responsible for inventory management, companies can optimize their stock levels and thus reduce storage costs.

Increased efficiency in the supply chain

VMI enables closer cooperation between suppliers and customers, which leads to better planning and faster response times.

FlexxLink offers users of Dynamics 365 Finance & SCM the option of setting up an EDI-supported vendor-managed inventory process. This provides suppliers with extensive options for influencing processes in the customer system, resulting in a high degree of automation and increased efficiency.

Monitoring of inventories and forecasting of demand by the supplier

As a basis for the use of vendor-managed inventory, processes are required that enable the supplier to monitor stocks on the customer side. On the basis of this inventory monitoring and any minimum stock levels, forecasts can be created for necessary deliveries of goods.

Stocks can be monitored using a variety of technical solutions:

  • Transmission of stocks and/or consumption via EDI
  • Logging of stock changes using third-party systems
  • Manual exchange between customers and suppliers on stocks

Posting of orders by the supplier in the customer system

If inventory monitoring indicates that stock needs to be replenished, the ordering process must be triggered in Dynamics 365 Finance & SCM.

FlexxLink offers the possibility for suppliers to trigger their own purchase order in the customer system via EDI:

  • The article master data between the customer and supplier systems are coordinated
  • Suppliers can create purchase orders for themselves via the FlexxLink REST API endpoint
  • FlexxLink enables parameter-controlled processing of externally created orders

This process does not incur any costs on the customer side and suppliers can use self-service to manage the customer's stocks.

Transmission of order confirmation to the supplier

Once the order has been created in the customer system, further internal processes can follow to generate the order confirmation and initiate its transmission to the supplier.

With FlexxLink, it is also possible to automate the posting of the order and transmit the corresponding order confirmation to the supplier completely automatically. While the ORDERS format is generally used here in the EDI context, non-EDI-based documents can also be created and transmitted via Lasernet, for example.

FlexxLink thus enables fully automated processing of orders within the framework of vendor-managed inventory. The associated resource savings therefore complement the existing advantages of a VMI connection.

Next steps with FlexxLink

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coming soon

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