VMI: Is it just for commoditised parts?

Traditional Vendor managed inventory has been utilised as a process for managing high volume low value parts into companies for many years. Outside of the automotive industry there is a reluctance to apply the same methodologies to low volume and/or high value parts.
Because Vendors:

• Cannot afford to have such high levels of unsold inventory in the supply chain
• Cannot cope with the cost impact of potential obsolescence of high value parts
• Think there is a perception of taking large risk entering into VMI deals
• Experience customers consumption being too unpredictable to manage the re-supply

Because customers:

• Find communication of consumption information to the vendor is difficult
• Find it difficult to adequately control high value inventory in their factory when using VMI
• Will not underwrite such high value parts

Using Goldratt’s Theory of Constraints as a basis for the solution, Goldratt UK will:

• Introduce dynamic management of inventories across the supply chain
• Align frequency of re-supply with consumption
• Significantly reduce the order lead time
• Significantly reduced levels of high value inventory in the supply chain whilst maintaining availability
  • Reducing risk of obsolescence
  • Reducing the need for cash
• Clear visual indicators of inventory status of the slower movers
• Proven robust processes for reducing the risk with unpredictability of consumption
• Regular re-supply leading to reductions in levels of stock at the vendors and customer

Contact us to find out how to create this win – win solution without causing massive disruption elsewhere in your supply chain.