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Top 3 Performance Indicators to have in an Effective VMI

inventory

Top 3 Performance Indicators to have in an Effective VMI

To ensure effective inventory management, a supplier must have quality Vendor Managed Inventory (VMI). But how do you evaluate such software before purchasing and implementing it? What metrics should you look for?

Inventory Management

In a buyer/supplier relationship, the retailer and vendor are often jointly involved in inventory management, an approach called collaborative supply management. In the context of VMI (Vendor Managed Inventory), the delivery of goods to warehouses and stores is the vendor’s responsibility – they are required to deliver goods based on customer needs.

To successfully manage supply operations and ensure good processing speed, suppliers must keep track of their inventory levels. By getting up-to-date data on stock levels in warehouses and stores, suppliers can cover demand for goods and prevent costs and shortages.

The objective/goal: To have the right amount of goods at the right time, thanks to an adequate assessment of needs.

Demand Forecasting

For the most accurate supply management, suppliers make their forecasts based on the preliminary trends that VMI generates. To improve efficiency, the management tool should quickly and easily forecast demand. Additionally, the tool should provide the ability to check the reliability of the forecast at the end of the cycle (day, week, month) to assess future supplier needs.

For example, the software has predicted that customers will have demand for 200 security lockboxes. At the end of the cycle, we should be able to verify that all of the predicted items have been sold.

The objective/goal: Make the necessary changes in the next delivery cycle so that we don’t have to rely on chance.

Service Rate

Typically, retailers use a collaborative inventory management model when they intend to achieve an optimal service rate.

The objective/goal: no shortages and always meet store demands.

By sharing inventory management responsibilities, retailers aim to meet store demands while reducing inventory. Therefore, to optimize service rates, suppliers must be prepared to ship items coming in from different delivery points every day.

In a vendor-controlled supply chain model, a quality VMI solution is a key element in ensuring effective collaboration between all parties in the relationship. Only with fine-tuned inventory management and reliable demand forecasting is it possible to achieve optimal service rates. Which is simply necessary to build a successful vendor-implemented inventory management model.

Generix Group North America provides a series of solutions within our Supply Chain Hub product suite to create efficiencies across an entire supply chain. Our solutions are in use around the world and our experience is second-to-none. We invite you to contact us to learn more.

This article originally appeared here. Republished with permission. 

digital

Train Your Employees in Digital Tools: 3 Best Practices

Mastering flow management solutions, interacting with autonomous mobile robots, running a warehouse remotely during periods of confinement: the digitalization of the supply chain requires logistics professionals to develop their digital skills. Here are the 3 best practices to make your digital transformation a reality and optimize it.

In a sector that is constantly evolving and undergoing digital transformation, the effectiveness of training for logistics operators and managers is both a competitive lever and a competitive advantage.

-How can you transfer new skills and reflexes to employees in an agile and sustainable way?

-How can you encourage the adoption of digital tools in the face of potential resistance to change?

Our advice for optimizing the commitment of employees in the crucial process of ‘digital upskilling’:


 

1. Make digital meaningful again, with training in context or on the job

According to McKinsey, 90 million European workers will have to significantly renew their skills in the coming decade, as more than 20% of their current tasks will be taken over by technology. This is considerable, and it is likely that this figure will be even higher in the supply chain sector, where robotization and process automation are already prevalent. If these transformations can raise legitimate concerns in warehouses and logistics platforms, professional training is the ideal place to demystify technology by providing evidence of its usefulness and interest for employees. However, this is only possible if it provides concrete and realistic answers to everyday problems.

For your training courses, avoid focusing on generic e-learning modules or only on theoretical training courses, which are too disconnected from the reality of the field. When it comes to digital technology, employees need to project themselves. By organizing sessions directly in the workplace, through real-life applications, employees will be able to appropriate digital tools and perceive their impact. And thus, judge for themselves their potential benefits. This includes: the reduction of work drudgery, more space for initiative, quality control, and communication.

The rate employees are trained in digital technology and the completion rate of training courses are indicators that HR/training departments monitor closely. Especially in an industrial context, where access to online training is more complicated to organize. Some companies, such as Continental, have decided to install “learning boxes”, a kind of bubble equipped with screens and digital tools, in the heart of production areas, to encourage employees to take self-service training through technical tutorials or serious games.

2. Encourage reverse mentoring

In the jargon of human resources, we speak of ‘reverse mentoring’. The principle is to create a bilateral learning system between a young ‘digital native’ employee and a senior employee, less familiar with digital and technological uses. This approach can be part of an official mentoring program run by the company’s training department, with predefined training content, an action plan, and objectives. Or it can be more informal and spontaneous, with exchanges and collaborative workshops. In all cases, this practice not only promotes the transfer of digital skills, but also stimulates intergenerational links within companies, while encouraging employee commitment and retention.

3. Leverage virtual reality (VR) or augmented reality (AR) devices

Used for training purposes, virtual reality offers the advantage of immersing employees in a work environment similar to their own, without risk to their safety and without interrupting the production line. In the case of augmented reality, they can even be immersed in the real ‘setting’ of their company. Equipped with a helmet, a joystick and a screen, learners can thus familiarize themselves with new gestures and undergo various business scenarios in a fun way. For example, they can drive a remote-controlled forklift truck while avoiding obstacles or try to find the fastest way to a product reference. They can even simulate inventory management in a virtual warehouse. This type of immersive experience allows the employee to be an actor in his training and to learn from his mistakes. Customized to the company’s needs or available off-the-shelf from training program publishers, these devices can integrate collective simulation experiences, aimed at training multidisciplinary teams.

This VR-based approach is still relevant in the post-Covid era, where more and more tasks are destined to be performed remotely.

Thanks to virtual reality, Danone and Generix Group have developed, in Russia, a methodology allowing the production of remote warehouse management systems (WMS) in several sites in a synchronous way. Discover our dedicated content.

-Data Science: new jobs in the Supply Chain

-Warehouse storage: when algorithms facilitate optimization

-Digitalization of the supply chain: what impact on the skills required?

Generix Group North America provides a series of solutions within our Supply Chain Hub product suite to create efficiencies across an entire supply chain. From Warehouse Management Systems (WMS) and Transportation Management Systems (TMS) to Manufacturing Execution Systems (MES) and more, software platforms can deliver a wide range of benefits that ultimately flow to the warehouse operator’s bottom line. Our solutions are in use around the world and our experience is second-to-none. We invite you to contact us to learn more.

warehouse

Attracting a New Generation of Warehouse Workers

One of the biggest problems facing the warehousing industry today is the shortage in warehouse workers. Prior to the pandemic, it was estimated that the warehousing industry needed to fill roughly 450,000 jobs. Since then, the shortage has dramatically increased. 

 

As the world moves past the pandemic it is only natural for more workers to be hired, but the solution to the original problem was never resolved. The solution to a warehouse worker shortage lies in WMS and automation to attract a new generation of Workers.

Generational Differences

 

The Department of Labor Statistics released a study that shows the average tenure of individuals between the ages of 18-19 is 0.8 years, 20-24 is 1.3 years, and 25-34 is 2.3 years. This data shows Millennials and Generation Z are not inclined to work in warehouses. Within the next few years, kids who were born the same year as the first iPhone was released will enter the workforce. People who have only ever known touch screen cell phones will be applying for jobs in your warehouse.

To attract a generation of individuals who have lived with technology their entire lives you must offer them a place to work that does not leave them mentally exhausted, eases their labor with the assistance of safe technology and gives them a place to be proud to work.

 

Cameron Coffee Warehouse Efficiency

 

Cameron’s Coffee is a coffee roasting, packaging, and distribution company that receives its coffee beans from South America, stores them in Minnesota, and ships them to hundreds of stores across the country. They originally had a paper-only warehouse where individuals had to manually check and encode items.

They decided to update their warehouse and use a combination of the SOLOCHAIN WMS and MES that directly tied in their ERP. With the addition of the software coupled with iPads and handheld devices the efficiency of the warehouse skyrocketed leading to the growth of sales by 50%, e-commerce growth by 200% and 25% expansion of the warehouse.

With the new software and iPads, the workers efficiency and happiness also increased, due to a reduction in the time required to complete their jobs, the new technology and increased independence.

 

Updating Your Warehouse is Good for Employees

 

Choosing a WMS to update your warehouse, will not only lead to efficiency gains but will lead to an overall boost in employee morale. The more you reduce the mental and physical strain on your employees the happier they will be. Utilizing technologies that younger staff is comfortable with such as iPads and touch screen devices will make them more comfortable at work. Implementing voice commands into your warehouse will relieve the workers of the mental strain and lead to an increase in productivity.

Creating a smart warehouse and considering what the employee wants will decrease the rate of people leaving your warehouse and decrease the amount of time spent training new hires. It is important that you begin to consider employee happiness and retention when deciding to upgrade your warehouse.

Generix Group North America provides a series of solutions within our Supply Chain Hub product suite to create efficiencies across an entire supply chain. From Warehouse Management Systems (WMS) and Transportation Management Systems (TMS) to Manufacturing Execution Systems (MES) and more, software platforms can deliver a wide range of benefits that ultimately flow to the warehouse operator’s bottom line. Our solutions are in use around the world and our experience is second-to-none. We invite you to contact us to learn more.

 

This article originally appeared on GenerixGroup.com. Republished with permission.