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The Endeavour VMI Advantage
Track, trace and control for vendor managed inventory

Vendor Managed Inventory programs have the potential to deliver huge benefits to both the supplier and vendor by improving material availability while decreasing overall inventory levels across the supply chain. However, unless visibility to inventory levels is available across the supply chain, in real-time, much of these benefits can be lost, as replenishment levels are based on outdated information.

ClearOrbit's Endeavour buy-side VMI module will ensure the benefits of a VMI program are fully realized at the lowest total cost of ownership. ClearOrbit combines web-based inventory visibility, integrated receiving, transfer of ownership and item-level tracking to provide a closed-loop approach that is unique in the industry. ClearOrbit places control at these key 'process gates' between manufacturers and suppliers. Endeavour VMI generates substantial ROI by providing a closed-loop solution which manages all key activities within the business process, including:

• Visibility
  
• The Receiving Process
  
• Transfer of Ownership
  
• Track, Trace and Control
  

Visibility
The Endeavour VMI module provides the vendor with the tools to effectively manage the inventory (which the vendor owns) at the Customer's (or 3PL) warehouse. Endeavour VMI integrates real-time data regarding on-hand inventories and forecast/planning requirements into a single web page accessible by suppliers via a standard browser. This information is combined with lead-time and in-transit data to give suppliers a comprehensive view of which items need to ship and when. Web-based visibility to all relative data negates the need for the vendor to have personnel on-site to monitor inventory levels, or to communicate inventory levels through batch uploads or spreadsheets. The vendor has full visibility to real-time inventory levels, plus in-transit and forecast quantities.

The Receiving Process
Most non-integrated VMI solutions require additional procedures at the receiving dock to ensure the correct transactions are executed when vendor managed inventory is received. This inventory must be available and visible to the customer, but is not yet owned by them. Typically, these inventories are stored in a VMI area of the warehouse. If this procedure is not transparent to the receiving dock employees, there is the possibility of this inventory being stored in the wrong area of the warehouse, becoming intermingled with 'owned inventory,' causing lengthy reconciliation and payment problems later in the cycle. The receiving dock personnel also need to execute different receiving transactions for VMI and regular "PO" receipts, which again will lead to reconciliation and payment problems if not correctly executed.

With the Endeavour VMI solution on the receiving dock, there is no special handling on the shop floor to transact a VMI receipt. Endeavour automatically determines the type of receipt and executes the necessary transactions in the background, directing the receiver to the correct area of the warehouse. No special training is required, since the business process for VMI and regular receipts is the exactly same. This simplicity eliminates reconciliation and payment problems that would otherwise bog down the system and undermine efficiency.

Transfer of Ownership In most VMI programs, the desired process is for the transfer of ownership to the customer to occur when vendor owned material is moved from its original consignment inventory location. Several inventory transactions could trigger this change of ownership, such as (1) moving items from a vendor owned inventory location, (2) sending vendor owned material for outside processing, (3) a cycle count loss, or (4) as part of a WIP backflush transaction. In a high velocity supply chain, this requires the tracking of hundreds or thousands of transactions to ensure inventory balances are correct, and that the vendor is paid the correct amount at the correct time. It is the key to effective VMI that does not add significant administrative costs to reconcile transactions. The Endeavour VMI solution automatically tracks all of these transactions, executing the required ERP transactions for the customer to take ownership of the inventory, and pay the vendor for the consumed quantities. Balances and transactions are available online to vendors to aid in their replenishment process.

Track, Trace, and Control The Endeavour VMI application supports VMI processes by combining track, trace and control capabilities, including package-level tracking provided by a unique PTN (Package Tracking Number) printed on every shipping label and scanned as part of the receiving process. These elements create a "closed-loop" process that eliminates errors that otherwise result in supplier claims and poor material availability. This also ensures a 100% reconciliation process for inventory receipts. Administrative and receiving personnel are free to focus on processing orders and responding to customer requests rather than tracking down vendor payments and reconciling inventory transactions.

Benefits of using VMI solution from ClearOrbit:

• Provide visibility to demand earlier in cycle
• Dedicated physical inventory locations for consigned parts, visible to ERP planning
• Use Inventory Min/Max levels to control consigned space required by supplier
• Consign high dollar value (A items), outsource low dollar value (C items), leverage inventory manager
• Provide visibility to execution data to supplier and customer when vendor owns goods
• Reduce current inventory levels
• Better utilization of assets
• Support Just in Time (JIT) production
• Improve customer service and responsiveness
• Minimum user training since no special handling is required to transact VMI items

Endeavour SOI
     Supplier owned inventory integrated to the ERP

Endeavour SOI (Supplier Owned Inventory) complements the VMI module to provide backend transactions that affect the transfer of ownership from the supplier to the manufacturing customer. Together VMI and SOI allow vendors to manage on-site inventory and delay ownership until the material is consumed in the manufacturing process. SOI integrates tightly with the customer's ERP system so that material is visible to the ERP for planning purposes, but is not owned by the customer until a consumption transaction takes place.

Customer Tools to Ensure Process Consistency
Endeavour VMI gives the customer control of the inventory the supplier owns by providing track, trace and control through PTNs. On the receiving floor, there is no special handling required by the users to transact the vendor owned inventory. Endeavour VMI is configurable at the supplier/item/site level—suppliers or items can be added or removed from SOI control at any time.

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