|
The Benefits of VMI are numerous for both Manufacturer & Distributor. Here is a
partial Listing:
DUAL BENEFITS:
- Data entry errors are reduced due to computer to computer communications. Speed of the
processing is also improved.
- Both parties are interested in giving better service to the end customer. Having the
correct item in stock when the end customer needs it, benefits all parties involved.
- A true partnership is formed between the Manufacturer and the Distributor. They work
closer together and strengthen their ties.
- Stabilize the timing of Purchase Orders - PO's are now generated on a predefined
basis.
DISTRIBUTORS BENEFITS:
- The goal is to have an improvement in Fill Rates from the manufacturer and to the end
customer. Also, a decrease in stockouts and a decrease in inventory levels.
- Planning and ordering cost will decrease due to the responsibility being shifted to the
Manufacturer.
- The overall service level is improved by having the right product at the right time.
- The manufacturer is more focused than ever in providing great service.
MANUFACTURERS BENEFITS:
- Visibility to the Distributors Point of Sale data makes forecasting easier.
- Promotions can be more easily incorporated into the inventory plan.
- A reduction in Distributor ordering errors (which in the past would probably lead to a
return)
- Visibility to Stock Levels helps to identify priorities (replenishing for stock or a
stockout?). Before VMI, a manufacturer has no visibility to the quantity and the products
that are ordered. With VMI, the manufacturer can see the potential need for an item before
the item is ordered.
|
