Discussion on VMI mode under the hottest supply ch

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Discussion on VMI mode under supply chain management

the proposal of VMI mode mainly stems from the consideration of the function integration of Supply Chain Management (SCM) mode. That is, the basic assumption of VMI mode is to try to reduce the overall inventory cost by integrating the inventory control functions of each node enterprise in the supply chain

first, the necessity of innovating the traditional inventory control methods

in the practice of inventory management of enterprise products, the traditional inventory control methods have increasingly exposed two inherent defects: first, the inventory management of enterprises is too extensive and simple, and advanced inventory management techniques and methods are rarely used, so the inventory cost of enterprises has always been high. Second, many enterprises do their own things in inventory management, "everyone sweeps the snow in front of their own door", that is, they manage their own inventory. As a result, the repeated construction of inventory facilities is serious, and waste is very common

under the condition that many enterprises implement supply chain management (SCM) at present, this disadvantage of the traditional inventory control method is more prominent: in order to cope with the sudden changes in demand and protect their own interests, each node enterprise often expands the inventory level in case of unexpected needs, which is understandable, but it increases the overall inventory cost of the supply chain, resulting in an increase in the operation cost of the supply chain, Reduce its overall competitive advantage. This is undoubtedly not conducive to the supply chain enterprises to obtain a dominant position in the competition when the competition between enterprises is increasingly changing into the competition between supply chains. Therefore, it is necessary for enterprises to reform the traditional inventory control methods and seek new inventory control modes to reduce inventory costs. The Vendor Managed Inventory (VMI) model can well solve this management problem

second, the connotation and characteristics of VMI mode

the proposal of VMI mode mainly stems from the consideration of the function integration of Supply Chain Management (SCM) mode. That is, the basic assumption of VMI mode is to try to reduce the overall inventory cost by integrating the inventory control functions of each node enterprise in the supply chain. The basic connotation of VMI mode is to implement strategic cooperation between suppliers and users, adopt a scheme that can minimize the cost for both parties, and manage inventory by suppliers under the target framework satisfactory to both parties. Compared with traditional inventory control methods, vmipha degradable high molecular materials have the potential use of anti infection. The mode has the following characteristics: (1) cooperation. The successful implementation of VMI mode objectively requires the enterprises in the supply chain to cooperate closely on the basis of mutual trust. Among them, trust is the foundation and cooperation is the guarantee. (2) Mutual benefit. VMI pursues the realization of win-win, that is, VMI mainly considers how to reduce the inventory cost of both parties, rather than how to allocate the cost burden of both parties. (3) Interactivity. VMI requires enterprises to take a positive attitude when cooperating, so as to realize rapid response and strive to reduce the situation of excessive inventory costs caused by poor information. (4) Agreement. The implementation of VMI requires enterprises to achieve the same goals in concept and clarify their respective and obligations. Specific cooperation matters are clearly stipulated through the framework agreement to improve the feasibility of operation

III. operation of VMI mode

assume that in a simple supply chain environment, the supply chain is: suppliers, wholesalers, retailers, consumers. VMI mode operation can be carried out from the following aspects:

1. Infrastructure construction. From the above VMI mode, we can see that in order to truly realize supplier management of user inventory, the following conditions must be met: first, transparency of user inventory status, that is, suppliers can track, investigate and check the inventory status of wholesalers or retailers at any time. The second is the standardization of business processing, which mainly specifies the standardization of single business processing. Therefore, if suppliers want to implement VMI for their users, they must carry out some technical support construction related to VMI

with the increasing popularity of internet/intranet, suppliers can use Internet to connect with the Internet through high-speed data private line, connect with their own intranet through router, and then provide various information access, processing and other services for the supplier's inventory management department by the server in the intranet. In addition, suppliers should also adopt bar code technology and ID code to code their own goods, and obtain the mark code of goods, such as ean or UCC, to realize the accurate identification of users' goods, so as to track and check users' inventory status at any time and quickly respond to users' needs. In order to ensure the safety and reliability of order transmission, processing and other businesses between suppliers and users, suppliers can adopt unified standard EDI messages for real-time data exchange of goods. Moreover, in order to improve the overall operation efficiency of the supply chain, suppliers can also use the inventory report list based on the standard EDIFACT to implement inventory control, so as to improve the monitoring efficiency of suppliers to users' inventory

2. Establish a special user management function department. After implementing VMI, in order to integrate the inventory control function of users, suppliers need to separate the user management function from the traditional financial management department, which is specially used to deal with the ordering business between suppliers and users, the inventory control of suppliers to users, and other related businesses

3. Establish a target framework agreement between suppliers and users. Suppliers should negotiate with users to determine inventory inspection cycle, inventory maintenance level, order point and other core issues related to inventory control, as well as how to exchange and access information, transfer and process orders and other business processes between the two parties

4. Build a perfect sales management system. In order to effectively manage users' inventory, suppliers must be able to quickly understand the market demand dynamics and commodity demand information, so as to supply commodities in a targeted and timely manner, which can not only speed up suppliers' response to users' needs, but also reduce users' inventory level. Therefore, on the one hand, suppliers can quickly grasp the changes in customer needs by building a customer archive information base, strengthen the accuracy of demand prediction and analysis, and impact the test function to a certain extent. How long will it take? To solve the problem of excessive inventory caused by "demand amplification effect". On the other hand, suppliers can use ERP system software (Enterprise Resource Planning System) to establish a perfect sales network management system by using internet/Intranet technology, so as to speed up the information transmission and real-time processing speed in the supply chain

IV. precautions for implementing VMI mode

1. Pay attention to the scope of application of VMI mode. This paper mainly discusses the feasibility of implementing VMI mode in enterprises under the supply chain management mode. Generally speaking, it is more suitable for the implementation of VMI mode in some specific cases. For example, suppliers have strong economic strength, strong inventory storage level and cargo transportation and distribution capacity, as well as stable and reliable domestic information sources; Wholesalers have limited inventory facilities, so it is difficult for them to effectively manage the inventory level; Close cooperation between suppliers and wholesalers, etc

2. In the process of implementing VMI mode, enterprises should pay attention to cooperate with other advanced inventory control methods to minimize inventory costs and improve the competitiveness of enterprises. For example, enterprises can adopt joint inventory management (mainly to solve the problem of high inventory caused by demand amplification), Multi-level Inventory Optimization and control and other methods

v. case analysis

1. Enterprise Name: American dakohide clothing company (referred to as DH company)

2. Case background: DH company found that many customers want to adopt EDI technology and form a relationship of mutual benefit, trust and information sharing. DH company regards VMI as a strategic measure to increase clothing sales, improve user service level, reduce inventory costs and strengthen customer contact

3. Implementation of VMI

DH company first carried out a series of technical infrastructure construction. DH company chose MMS system of STS company and VMI software based on client/server. DH company adopts Windows NT, uses PC as server, and has five user terminals. With the cooperation of STS company, systematic training was carried out for employees, and necessary basic parameters and usage rules were set. Technicians have prepared specific procedures for the data and EDI service management of the host system

then, DH company began to implement VMI system for customers in its distribution chain. The company inputs the distributor's parameters, configuration, delivery cycle, transportation plan, sales history data and other data into the computer system. After the establishment of MI system, V has become an important indicator to measure the design ability of each vehicle, the customer will transmit the sales and inventory data to DH company every week, and then the host system and VMI interface system will process it. The company uses VMI system to predict weekly (or monthly) sales volume and inventory demand for each customer by comprehensively using a variety of prediction tools according to historical sales data, seasonal styles and other factors

4. Evaluation of implementation effect

according to the statistics of the vice president of Information Department of DH company, after the implementation of VMI system, the inventory of distributors has been reduced by 50%, and the sales volume has increased by 23%. DH company and customers have achieved the expected goals

however, DH company needs to further expand the VMI system, and in order to quickly obtain customer data, it is necessary for the company to build an ERP system and use the rich resources of the Internet to further reduce operating costs. (end)

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