The use of VMI has gained acceptance in many industries. What was once thought of as an experiment, has now become the preferred way of doing business.
This newsletter keeps you informed on the increasing growth of Vendor Managed Inventory. The recent news articles and press releases found within explore the innovation that is becoming the standard throughout the business world.
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Supply Chain Management Blog, 2011
Vendor Managed Inventory is a collaboration mechanism to improve supply chain management operations. This practice was first implemented by Walmart and P&G in 1980’s. Concept of Vendor Managed Inventory (VMI) is that customer shares demand information to supplier then supplier delivers products to customers automatically.
NC State University, Poole College of Management
The goal of Vendor Managed Inventory is to provide a mutually beneficial relationship where both sides will be able to more smoothly and accurately control the availability and flow of goods. In VMI a manufacturer or distributor assumes the role of inventory planning for the customer. Extensive information sharing is required so that the manufacturer/distributor can maintain a high degree of visibility of its goods at the customer’s location. Instead of the customer reordering when its supply has been exhausted, the supplier is responsible for replenishing and stocking the customer at appropriate levels.
LMA Consulting Group, Inc
“For example, in one company, we implemented a vendor managed inventory program with our #1 customer, and we went from unreliable service levels to winning the coveted supplier of the year award. We involved the entire supply chain in that we determined how to fulfill our customer’s distribution centers to ensure 98-99% service levels by becoming more intimately involved in the complete supply chain — incorporating in our customer’s customers’ demand data, involving our carriers as partners to ensure delivery performance within shipping lanes, and partnering with suppliers through a collaborative forecasting process.”
Dun & Bradstreet
By becoming vendor managed inventory partners, both parties benefit. Small businesses, as the customer, become supplied by more informed vendors, and vendors get valuable information that may help them sell more.
In Lafayette, Ind., VMI is a key component for distributor Kirby Risk and its overall supply chain strategy. “Today, many of our leading suppliers, including Hubbell, Ideal, Rockwell, Siemens, and Thomas & Betts are using VMI, explained Joe Hart, Kirby-Risk’s director of purchasing and material management. In addition, we are also working with other key suppliers to discuss the implementation of VMI Eventually we plan to do include 10-14 major suppliers. When we get to that point, 80% of our inventory will be managed by VMI.”
http://www.tedmag.com/blog.aspx?id=3140&blogid=227&highlight=vendor managed inventory
Consumer Goods Technology
Consumer product suppliers and retailers alike are taking a fresh look at their Vendor Managed Inventory (VMI) programs and asking themselves how they can gain more value from those programs. Some suppliers are looking at ways to provide VMI at a lower cost, while others are seeing VMI as a strategic initiative. Dannon, is moving forward with a new view of VMI as a means to work more closely with key retail partners to: --Increase sales by reducing stock-outs --Reduce inventory costs --Facilitate better collaboration. Paula Sawyer, VMI program manager at The Dannon Company, Inc. will discuss the role of VMI in Dannon's "Customer First" program. Plus, Mike Griswold, VP of Research/Retail, in Gartner's Supply Chain Research will reveal the retailer perspective, including some of the initiatives major retailers have underway, and how they see supplier VMI programs fitting in with these efforts. If you are not already looking at how to better leverage VMI, you should be.
Consumer Goods Technology
Dan Wynn, chief operating officer, Carl Buddig & Company, comments, "We conducted a thorough evaluation of what we considered to be all of the major VMI alternatives in the consumer goods arena. Datalliance was chosen based on their lowest total cost of ownership, quick and easy implementation path, application functionality, and their demonstrated track record of success in our industry. Throughout our initial implementation with Kroger, Carl Buddig's users and IT support team rated Datalliance's training and customer support as outstanding and second to none. Many software and service providers will commit to a smooth, on time, and on budget implementation. It was our experience that Datalliance actually delivered on these commitments."
Ray Arnold, Director of IT at Anvil International, stated, "We are looking to lower the overall costs associated with our VMI program. Working with Datalliance, we expect to significantly reduce the time required to operate and maintain the system, as well as the effort needed to manage our VMI locations. Datalliance is easy to use and straightforward. The Software as a Service model reduces IT overhead costs that we incurred with our previous system."
"With Datalliance as our new VMI platform, we are helping our distributors achieve more consistent inventory turns and a lower stock-out rate across thousands of SKUs," said Vicki Repsholdt, Schneider Electric Director of Channel Operations. "Our distributors are very happy with the new system. Among other improvements, it does a much better job of helping identify opportunities for inventory transfers -- something that's important to our larger distributors. Datalliance's position as the leading VMI solution for the electrical industry made the transition easier for many of our distributors because they were already familiar with Datalliance through their participation in other suppliers' VMI programs."
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