Difference Between SMI and VMI in SAP SNC

I am providing a small description of the difference between SMI and VMI scenarios in SAP Supplier Network Collaboration.

SMI: Supplier Managed Inventory

VMI: Vendor Managed Inventory

Let’s start with an example business scenario.

A Manufacturing company M is manufacturing a product P. For manufacturing P the company needs raw material ‘R’ which is supplied by supplier ‘S’. After manufacturing the company sells it to it’s customer ‘C’.

Now if Supplier S wants to implement SAP SNC then it need to implement VMI scenario.

If Manufacturer M wants to implement SAP SNC then it need to implement SMI scenario.

Note: Both business concepts are same, i.e collaboration between customer and supplier. But the role playing by the implementing organization is different. In case of VMI the implementer plays as Supplier Role.