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Dynamics 365 Community / Forums / Microsoft Dynamics NAV (Archived) / Vendor Managed Inventory
Microsoft Dynamics NAV (Archived)

Vendor Managed Inventory

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Posted on by Ghetz 2,983

We are working with NAV 2018. I don't think that NAV allows to manage Vendor Managed Inventory situations, so I would like to have recommendations on development design for this feature. The process is as follows:

1. A vendor sends some items to our warehouse, but we don't actually purchase this items, we just have them in deposit. We need to know the inventory we have of this items

2. If one of our customers wants one of this items, we supply them. We need to create and invoice a Sales Order to our customer. Also, this is the moment we "purchase" the item to the vendor. We need to create a purchase order, and invoice it, but without generating item/warehouse entries, as we already did in step 1.

3. In some cases, we just supply the items to the vendor's customers. In this case, we do not purchase the item, we just remove them from our inventory.

Anyone been in a project with similar requirements? What would be the most optimal design, so we can reuse as much standard functionality as possible?

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  • Hannes Holst Profile Picture
    Hannes Holst 5,767 on at
    RE: Vendor Managed Inventory

    Ghetz,

    Theoretically, in your situation, you have some kind of costs for these items. E.g. receipt handling costs, storage costs, insurance, delivery, etc.

    These costs, you could post against the vendor inventory which is stored in your location(s). When you decide to purchase the items finally, the purchase invoice could consists of an Charge-Item only (and the the amount of course). You are able to assign a Charge-Item to a former receipt and to update the item costs of all item transactions originating from the selected receipt.

  • Ghetz Profile Picture
    Ghetz 2,983 on at
    RE: Vendor Managed Inventory

    Indeed this is also true, we have to post these inventory adjustments and find a way for them not to have weight in the item's cost.

    This is quite a challenging modification to do. The thing is that the way business is working now days, it's quite a requested feature. Many vendors are willing to give items in deposit and take them back.

  • Hannes Holst Profile Picture
    Hannes Holst 5,767 on at
    RE: Vendor Managed Inventory

    Hiya,

    Just throwing my 2 cents into the discussion:

    It might be difficult to maintain an Inventory which isn't paid for yet. Because the Inventory is combined of Item and Fincancials, normally you have to have a financial posting alongside the Item increase. In standard, NAV will create G/L-transactions on the Inventory Account by default.

    For above scenario you would need to maintain either 0 unit costs or a Posting Group-setup which balance the Inventory Account always to 0 when posting an Inventory Adjustment.

  • Ghetz Profile Picture
    Ghetz 2,983 on at
    RE: Vendor Managed Inventory

    I did not mention in the original post, but what about the Sales order/PackingSlip/Invoice we need to create for our customer in step 2?

    It's going to be quite a tedious process for the users.

  • Suggested answer
    Stefano Demiliani Profile Picture
    Stefano Demiliani 37,162 Most Valuable Professional on at
    RE: Vendor Managed Inventory

    1) You can use the Item Journal Batch to register the items to your warehouse (in a dedicated location for the vendor, for example location VENDOR).

    The inventory for this location is what your vendor has sent to you in deposit.

    2) In this case, you need to create a Purchase Order for the item to your vendor. This purchase order will have  your location (for example WAREHOUSE) and not the location reserved for the vendor (VENDOR).

    When you receive the purchase order, you need:

    - register the receipt (item is loaded on WAREHOUSE location)

    - register a negative adjustements for the item on VENDOR location

    3) This could be a transfer order from VENDOR to an external location (if you need a document). If you don't need a document, this could be a negative adjustement.

    This is what you can do with standard processes without any type of customizations.

    If you want to customize, you could for example create a function that, when a purchase order is receipt, automatically it creates the item ledger entry for moving items from VENDOR location to WAREHOUSE.

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