The scenario of procurement via vendor owned inventory describes the process flow for handling goods, which are procured from a vendor on consignment terms (vendor consignment). In this scenario the vendor provides materials and stocks them at the purchasers premises. The goods are owned by the vendor until they are consumed by purchaser. Consumption of materials as well as the need for a further fill-up of the stock or relevant planning data have to be communicated to the supplier. In case of latter, the scenario represents a variation of vendor managed inventory (VMI).