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Top 3 Performance Indicators to have in an Effective VMI


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. 

supply management

6 Important KPIs to Monitor in a Shared Supply Management Context

Making the right product available at the right time is a challenge industrial companies are faced with daily. To optimize their Supply Management, many are choosing Vendor Management Inventory, a system based on collaboration between client and vendor. To ensure your VMI project is successful, however, some KPIs must be monitored attentively. Generix Group has compiled everything you need to know on the subject in an infographic.

The challenges of Shared Supply Management

Implementing a VMI lets customers and vendors collectively manage their product workflows. Using this collaborative model, they can optimize Supply Management by geolocating stocks and measuring their levels according to real-time consumption data provided by sales locations. This leads to improved customer service, reduced overstocking, better cost management, and increased sales.

The Shared Supply Management process has proven itself to be an undeniable advantage, particularly when dealing with FMCG players. Powerful collaborative solutions have also proven to be a growth driver and can set a company apart from the competition.

To learn more about this topic: [Product Sheet] The Benefits of Shared Supply Management 

Six key VMI KPIs

Generix Group experts have defined six important KPIs to measure, from consumption predictions to stockout rates.

Whether you’re looking to improve needs evaluation to take advantage of forecasting trends and turnover rates, or directing future actions to limit surcharges, VMIs offer a wide array of key information and advantages, as shown in the infographic below.

Implementing a VMI offers a number of competitive advantages, provided that users know how to take full advantage of their solution. To do so, they must carefully monitor the right indicators. Generix Group has compiled a list in the six-point infographic below. Are you new to the collaborative adventure? Or perhaps you are looking for a way to guard against the risk of error. Generix Group is here to help!

This article originally appeared on Republished with permission.