Scor Model
Question one:
Many companies today are outsourcing the management of their inventories to supplier in vendor manager inventory (VMI) programs * Vendor-managed inventory (VMI) is an inventory management technique in which a supplier of goods, usually the manufacturer, is responsible for optimizing the inventory held by a distributor.
VMI requires a communication link—typically electronic data interchange (EDI) or the Internet—that provides the supplier with the distributor sales and inventory data it needs to plan inventory and place orders. In contrast, under the traditional arrangement the distributor handles those tasks. The inventory can be owned by the distributor, or by the supplier, often under consignment.
Vendor Managed Inventory is a program in which: 1. the supplier generates the customer’s order, 2. based on shared information on customer demand and inventory and 3. upon mutually agreed conditions
VMI – The Issues * Long-term forecasts are still generated through the supplier’s crystal ball. Because the customer does not give much forecast guidance or intelligence on promotional or market events, unexpected retail or inventory volatility will hit in-stock levels. * Little collaboration on the forecast (very rarely) * Customer gives you the data and the inventory policy and the supplier does the rest! * The success of the program rests on the supplier’s creativity and initiative and a good internal consensus process with sales staff on the field. * Companies are utilizing them as it’s one of the successful business models used by Wal-Mart and many other big box retailers. Oil companies often use technology to manage the gasoline inventories at the service stations that they supply.Home Depot uses the technique with larger suppliers of manufactured goods. VMI helps foster a closer understanding between the supplier and manufacturer by using Electronic Data Interchange formats, EDI software and statistical
Many companies today are outsourcing the management of their inventories to supplier in vendor manager inventory (VMI) programs * Vendor-managed inventory (VMI) is an inventory management technique in which a supplier of goods, usually the manufacturer, is responsible for optimizing the inventory held by a distributor.
VMI requires a communication link—typically electronic data interchange (EDI) or the Internet—that provides the supplier with the distributor sales and inventory data it needs to plan inventory and place orders. In contrast, under the traditional arrangement the distributor handles those tasks. The inventory can be owned by the distributor, or by the supplier, often under consignment.
Vendor Managed Inventory is a program in which: 1. the supplier generates the customer’s order, 2. based on shared information on customer demand and inventory and 3. upon mutually agreed conditions
VMI – The Issues * Long-term forecasts are still generated through the supplier’s crystal ball. Because the customer does not give much forecast guidance or intelligence on promotional or market events, unexpected retail or inventory volatility will hit in-stock levels. * Little collaboration on the forecast (very rarely) * Customer gives you the data and the inventory policy and the supplier does the rest! * The success of the program rests on the supplier’s creativity and initiative and a good internal consensus process with sales staff on the field. * Companies are utilizing them as it’s one of the successful business models used by Wal-Mart and many other big box retailers. Oil companies often use technology to manage the gasoline inventories at the service stations that they supply.Home Depot uses the technique with larger suppliers of manufactured goods. VMI helps foster a closer understanding between the supplier and manufacturer by using Electronic Data Interchange formats, EDI software and statistical