CMI – Customer Managed Inventory (Consignment Warehouse) At Continental
CMI is a consignment process in which Continental as the Customer to Supplier manages the material planning in terms of restocking and the Supplier resupplies the Contract Products as indicated in a Delivery Schedule to a location close to or at Continental premises.
As a part of the consignment process, Supplier understands and agrees that title to and ownership in the Contract Product together with risk of loss for the Contract Product shall pass to Continental only upon withdrawal of Contract Product from the consignment storage location. Continental withdraws the Contract Product as needed according to production demand. Nonetheless, Supplier shall remain obligated to deliver the Contract Product in accordance to Continental requirements.
In addition to Delivery Schedules, the Supplier will receive further information about consignment stock level and movements in the consignment inventory. The implementation of Customer Managed Inventory has benefits for both Supplier and Continental. Supplier will receive via EDI messages of Delivery Schedules and Inventory Reports (including consignment stock level and movements).
Note that quantities in the Delivery Schedules are in the case of Customer Managed Inventory ‘net requirements’. Net requirements are lot-sized and offset with planning logics as a result of applying gross requirements against current stock level, scheduled receipts, and safety stock (netting of gross requirements).
Supplier can use this information and the consignment inventory to optimize its logistics processes and provide the necessary flexibility within the lead-time. With this Supplier has more flexibility in arranging shipments, this is in case of CMI an extended window for early or late delivery for Logistics Supplier Evaluation. Details and further requirements for Customer Managed Inventory consignment process are agreed between the Parties in the respective Customer Managed Inventory contract and during the implementation of the Customer Managed Inventory Inventory.