Vendor Managed Inventory reduces stocks and increases service level

The VMI goal is an improvement in the performance in the supply chain, in which the supplier has access to data concerning customer stock levels and demand. The traditional VMI-approach is based on upgrading the supplier ERP system; this means investing in VMI software, integration of systems and additional, continual expenditure for suppliers.

• e-integration makes VMI available as a service.
• Tried and tested roll-out procedures enable a fast break-even.

• No investments in hardware or software.
• Fast reaction of the supplier to changing market needs.
• Introduction is completed in a short time and the operation is not a burden to either the supplier or the purchaser.
• Customers’ stocks are lowered by between 20% and 40% and at the same time service level is increased. The minimised stock-outs increase turnover for customers and also for suppliers.
• Cost-effective batch sizes.
• Stock management is looked after by the optimised system using e-integration at low running costs. Information on continual improvements via an objective indicator system.
• VMI also provides a basis for additional process improvements, e.g. Reduced transport costs.
• For suppliers as well as customers the introduction of VMI makes it easy to reconcile the strategic parameters of stock management.

• The customer sends their inventory stocks with an Inventory Report (INVRPT) to e-integration.
• From the customer’s INVRPT future need is conveyed using e-integration and, in the context of the parameters of stock management set, the optimal order suggestions are determined.
• The supplier receives the order suggestions from e-integration, as ORDERS, which they turn into deliveries and confirmation of this is relayed to the customer as Order Response (ORDRSP).
• Deliveries are notified via a delivery docket/Despatch Advise (DESADV), and used to prepare the customer’s goods inwards department.
• Extraordinary requirements (campaigns, large projects, etc.) are reported by the customer to e-integration and implemented in the relevant suitable order suggestions.