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    Roll. No Names 33. Sharda Rao 34. Bhavana Sundaram 35. Tamali Nandi 35. Megha Rastogi

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    Sharda Rao
    The document lists student roll numbers and names, including Sharda Rao, Bhavana Sundaram, Tamali Nandi, and Megha Rastogi. It then provides definitions and explanations of concepts like vendor managed inventory, benefits and potential pitfalls of VMI, keys to successful implementation, and examples of performance improvements from companies using VMI.

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    Roll. No Names 33. Sharda Rao 34. Bhavana Sundaram 35. Tamali Nandi 35. Megha Rastogi

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    Sharda Rao
    39 views18 pages
    The document lists student roll numbers and names, including Sharda Rao, Bhavana Sundaram, Tamali Nandi, and Megha Rastogi. It then provides definitions and explanations of concepts like vendor managed inventory, benefits and potential pitfalls of VMI, keys to successful implementation, and examples of performance improvements from companies using VMI.

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    The document lists student roll numbers and names, including Sharda Rao, Bhavana Sundaram, Tamali Nandi, and Megha Rastogi. It then provides definitions and explanations of concepts like vendor managed inventory, benefits and potential pitfalls of VMI, keys to successful implementation, and examples of performance improvements from companies using VMI.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    39 views18 pages

    Roll. No Names 33. Sharda Rao 34. Bhavana Sundaram 35. Tamali Nandi 35. Megha Rastogi

    Uploaded by

    Sharda Rao
    The document lists student roll numbers and names, including Sharda Rao, Bhavana Sundaram, Tamali Nandi, and Megha Rastogi. It then provides definitions and explanations of concepts like vendor managed inventory, benefits and potential pitfalls of VMI, keys to successful implementation, and examples of performance improvements from companies using VMI.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 18

    Roll.

    No Names

    33. Sharda Rao


    34. Bhavana Sundaram
    35. Tamali Nandi
    35. Megha Rastogi
    mhoose the correct answer

    1. Optimizes supply chain performance


    2. Supplier has access to customer¶s inventory data
    3. Supplier is responsible for maintaining the inventory level required
    by the customer
    4. The process is to resupply inventory by the vendor via scheduled
    reviews
    5. All of the above
    V efinition and Introduction of Vendor Managed Inventory
    V ata Transferred Method
    V WHY VMI?
    V Benefits of Vendor Managed Inventory
    V Potential Pitfalls of Vendor Managed Inventory
    V Martha-Wilson-Model
    V Four Stages of the Fully Automated VMI Model
    V Keys to Success
    The VMI process is a combination of
    e-commerce, software and people.
    The e-commerce layer is the
    mechanism through which companies
    communicate data .VMI data can
    be communicated via EI (electronic
    data interchange), XML (extensible
    markup language),FTP(file transfer protocol)
    or any other reliable communication
    method. The key feature of the e-commerce
    layer is that the data be timely and accurate.
    A means of optimizing Supply mhain performance in which the manufacturer is responsible
    for maintaining the distributor¶s inventory levels. The manufacturer has access to the
    distributor¶s inventory data and is responsible for generating purchase orders.

     
         
      

    V è
      
       When a distributor needs product, they place an
    order against a manufacturer.

    V 
     
    
    
        manufacturer receives electronic data (usually
    via EI or the internet) that tells him the distributor stock levels. The manufacturer is
    responsible for creating and maintaining the inventory plan.

    Under VMI, the manufacturer generates the order, not the distributors
    V Success in supply chain management usually derives from understanding and
    managing the relationship between inventory cost and the customer service level.

    V VMI should be about improving visibility of demand and product flow in a supply
    chain, facilitating a more timely and accurate replenishment process between a
    supplier (vendor) and an inventory site (customer, distributor, distribution center,
    etc«)
    UAL BENEFITS:

    V ata entry errors are reduced due to computer to computer communications.


    V Both parties are interested in giving better service to the end customer.
    V A true partnership is formed between the Manufacturer and the istributor.
    V Stabilize the timing of Purchase Orders
    V Increased Service Level To The End mustomer

    ISTRIBUTOR BENEFITS:

    V The goal is to have an improvement in Fill Rates from the manufacturer and to the end
    customer. Also, a decrease in stock-outs and a decrease in inventory levels.
    V Planning and ordering cost will decrease
    V The overall service level is improved by having the right product at the right time.
    V The manufacturer is more focused than ever on providing great service.
    V Increased Sales
    V Visibility of the istributor¶s Point of Sale data makes forecasting easier.

    V Promotions can be more easily incorporated into the inventory plan.

    V A reduction in istributor ordering errors (which in the past would probably


    lead to a return)

    V Visibility of Stock Levels helps to identify priorities (replenishing for stock or


    a stock-out?). Before VMI, a manufacturer has no visibility of 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.
    6  :
    V This reduces costs by permitting better resource utilization for production
    and transportation
    V it also reduces the need for large buffer stocks, which has additional cost.
    V transportation costs are reduced with VMI.

      


    V service is usually assessed by measuring product availability.
    V coordination of replenishment orders and deliveries across multiple
    customers helps to improve service.
    V the supplier can prioritizing customer shipments effectively
    V stock balancing can be achieved
    Although VMI has many benefits, it also has its potential pitfalls. Here are the
    common ones and how to avoid them:

    V 4   
    Extensive EI testing should be done to validate the data being sent. Is the
    distributor sending all the data that should be sent? Is each field populated with the
    correct data?

    V ˜
    
    Make sure that all employees involved in the process fully understand and accept
    this new way of doing business. It's not enough to just sell the concept to senior
    management, all employees who are involved must be willing participants.

    V ð  
    4
    
    Anything that adds or takes away from the normal ordering pattern must be properly
    communicated to the manufacturer.
    V  
    Any large customers, either gained or lost, must be communicated to the
    manufacturer. The distributor must guide the manufacturer on how this will
    affect sales.

    V @@  


    An agreement must exist between the manufacturer and the distributor on what
    to do if an overstock does occur (or in the case of an ordering error). Also, both
    parties must agree on how to handle obsolete stock.

    V  
    Both parties involved must understand that this is a learning process. Errors will
    occur. You will probably not have a perfect process in place day 1.
    Four parameters to determine The performance measures are :
    performance measures :

    V Retail Inventory V Unfilled retail customer orders

    V Warehouse inventory V Maximum number of goods in transit

    V Subassembly goods in transit V Maximum inventory level

    V Raw materials in transit V Average inventory level


    `   

     ð 


    
    4

    ! ˜
    
    Examples:
    Milliken and mompany:
    The lead time from order receipt at Milliken¶s textile plants to final clothing receipt at
    several of the department stores involved was reduced from eighteen weeks down
    to three weeks.

    VMI allows vendors to high-volume retailers such as, WAL-MART to quickly


    identify accelerated sell-through, optimize store assortments and easily react to
    market or regional changes.

    VMI Projects have shown sales increases of 20 to 25 percent, and 30 percent


    inventory turnover improvements.
    one effectively, VMI delivers tangible results throughout the supply chain.
    As the concepts and practices of µlean¶ extend beyond the manufacturing
    floor down through the supply chain, VMI is the enabling process to drive
    out costs and time. To ensure you realize the full impact of the VMI
    experience, follow these keys to success:

    1. Set, review and maintain performance goals


    2. Manage all SKU¶s through VMI to minimize supply chain transactions
    3. Spend the time and effort up front to ensure data accuracy
    4. Utilize local market intelligence to augment the automated replenishment
    decisions
    5. monduct periodic performance reviews
    6. Use the metrics to find cost and inefficiencies, then work together to
    eliminate.

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