Can Vendors process their "order" and can create "shipment" ?
Yes vendor can process their order and can create shipment if he will purchase our Vendor Order Add-on and for shipping the product he will also need to purchase Vendor Multi shipping Add-on and any respective Vendor Shipping method Add-on.
Here is the link for both the add-ons from where you can purchase them:
Vendor Order Add-on http://cedcommerce.com/magento-extensions/marketplace/vendor-order-addon
Vendor Multi shipping Add-on http://cedcommerce.com/magento-extensions/marketplace/vendor-multi-shipping-addon
Vendor Shipping Methods http://cedcommerce.com/magento-extensions/shipping-methods