In my experience, the following risks must be managed in the Vendor Managed Inventory (VMI): Vendor Managed Inventory (VMI) is defined as a supplier/supplier managed stock. Vendor Managed Inventory (VMI) includes a portion other than the customer who assumes responsibility for inventory management elements, including inventory fixing and management, recommendability and repopulation. With VMI, the supplier indicates the quantities of delivery sent to customers through the distribution channel and uses data from the Electronic Data Interchange (EDI). There are a number of EDI transactions that may be the basis of the VMI process, 852.855 and 856. The manufacturer can benefit from a number of advantages of the vendor-managed inventory, as it can access the data pos (customer point of sale), which makes forecasting a little easier. Manufacturers can also translate their customers` advertising plans into forecast models, which means there will be enough warehouses available when their promotions are in progress. Because a producer has more transparency about his customers` inventory, it is easier to make sure that there will be no inventory because he can see when to produce items. Few points were mentioned in this summary: “Better visibility will allow the switch from air freight to sea freight” is, in my opinion, a fairly strong expression, without knowing the LT for air and sea transport, the dynamics of demand and the cost of storing equipment. – As has been said in some previous comments, in the VMI logistics input model, there are many things that need to be agreed between the customer and the supplier. This is consistent with the result of my master`s thesis “already covered with dust” on the implementation of VMI (with emission): the hardest and longest part of the implementation project is the legal agreement.
Setting up transport and system-to-system connections with developed messages and related features in legacy systems with SOX requirements is the simplest part of the implementation. Vendor Managed Inventory (VMI) is a supply chain initiative that allows the supplier to manage the inventory of agreed storage units on customer sites. The benefits of VMI Programe are well recognized by successful retailers like Wal-Mart. VMI is a logistics distribution strategy whereby the supplier manages the portfolio on customers` sites and decides on refuelling policies, subject to availability and service. The supplier benefits from reduced inventory, reduced variability in customer demand and improved routing strategies. Customers benefit from reduced resources for inventory management and reduced inventory, which increases their revenues.