Vendor Managed Inventories
20.5.2010 Seda Aksoy |
Project 2 | VENDOR MANAGED INVENTORY (vmı) |
CONTEXT
1. What is Vendor Managed Inventory (VMI)
2. Advantages and Disadvantaged of VMI
3. Types of starting-up a VMI Program
4. Six Steps to a Successful VMI System
5. Usage of VMI Applications
6. How to make VMI Work
1. WHAT IS VENDOR MANAGED INVENTORY
Vendor Managend Inventory (VMI) is a supply chain practise where the inventory is monitored, planned and managed by the vendor on behalf of the consuming organization, based on the expected demand and on previously agreed minimum and maximum inventory levels. Traditionally, success in supply chain management derives from understanding and managing the tradeoff between inventory cost and service level. VMI projects can result in improvements along both dimensions. At least 2 forms can be distinguished : 1. A wholesaler (distributor) manages inventory levels for a retailer. VMI in this context is also called Efficient Consumer Response (ECR). Note that the retailer still owns the incentory, even though the replenishment order is triggered by the wholesaler. 2. A manufacturer manages invemtory levels for a distributor. Note that the distributor stil owns the inventory, even though the replenishment order is triggered by the manufacturer.
VMI is based on the belief that suppliying parties are in a better position to manage inventory as they have better knowledge of the goods production capacities and lead times. Also it is based on the belief that allowing vendors to manage inventory reduces the number of layers in the supply chain, increasing stock visibility and reducing overall inventory levels. To enable VMI, sales data must be provided to the vendor via Electronic Data Interchange ( EDI), other electronic means, or via traditional human agents at outlets.
Other terms for VMI are Continuous Replenishment and
Project 2 | VENDOR MANAGED INVENTORY (vmı) |
CONTEXT
1. What is Vendor Managed Inventory (VMI)
2. Advantages and Disadvantaged of VMI
3. Types of starting-up a VMI Program
4. Six Steps to a Successful VMI System
5. Usage of VMI Applications
6. How to make VMI Work
1. WHAT IS VENDOR MANAGED INVENTORY
Vendor Managend Inventory (VMI) is a supply chain practise where the inventory is monitored, planned and managed by the vendor on behalf of the consuming organization, based on the expected demand and on previously agreed minimum and maximum inventory levels. Traditionally, success in supply chain management derives from understanding and managing the tradeoff between inventory cost and service level. VMI projects can result in improvements along both dimensions. At least 2 forms can be distinguished : 1. A wholesaler (distributor) manages inventory levels for a retailer. VMI in this context is also called Efficient Consumer Response (ECR). Note that the retailer still owns the incentory, even though the replenishment order is triggered by the wholesaler. 2. A manufacturer manages invemtory levels for a distributor. Note that the distributor stil owns the inventory, even though the replenishment order is triggered by the manufacturer.
VMI is based on the belief that suppliying parties are in a better position to manage inventory as they have better knowledge of the goods production capacities and lead times. Also it is based on the belief that allowing vendors to manage inventory reduces the number of layers in the supply chain, increasing stock visibility and reducing overall inventory levels. To enable VMI, sales data must be provided to the vendor via Electronic Data Interchange ( EDI), other electronic means, or via traditional human agents at outlets.
Other terms for VMI are Continuous Replenishment and