Vendor Managed Inventory
VMI
Diamond Fasteners provides the customer with a fully customizable Vendor Managed Inventory Program. With a working knowledge of the operations and workflows of individual customers, Diamond provides a detailed plan to cut down on current processes for a value added system. The below system is an overview of Diamond's initial setup of the VMI:
Step 1 - Senior Sponsorship:
Since the business paradigm is changing, senior management must make a firm commitment to this new process. VMI must have senior management sponsorship. It should be identified as a strategic objective and then communicated throughout the organization. Senior management must commit to the costs involved, and the manpower needed for setup/maintenance. For the distributor, they must also become comfortable with the concept of having someone else manage their inventory.
Step 2 - Employee Acceptance:
Get all employees to buy into the concept, especially the person currently responsible for maintaining the inventory levels. Without their acceptance, your program will never work. They must understand that VMI will not push them out of a job. It will free up some of their time to allow them to be more productive in other areas. Employees should be given a complete overview of what VMI will mean to the company and the reasons why it's being done.
Step 3 - Customization and Implementation:
After full sponsorship from senior management and employee acceptance the next step would be for Diamond to visit the customer to properly understand current processes and warehouse workflow. After a full understanding of workflows Diamond's VMI team will then provide a plan to move processes out of the warehouse into Diamond's umbrella which in turn cuts costs in a number of ways. Diamond Fasteners will then provide the customer with a full overview of the VMI plan and implementation will proceed.
Benefits of VMI:
By removing processes out of the warehouse and into Diamond Fastener's can be quantified easily as it cuts down on warehouse errors, manpower hours and stock attrition. Other benefits for both parties are listed below:
- Data entry errors are reduced due to computer to computer communications. Speed of the processing is also improved.
- Both parties are interested in giving better service to the end customer. Having the correct item in stock when the end customer needs it, benefits all parties involved.
- A true partnership is formed between the Manufacturer and the Distributor. They work closer together and strengthen their ties.
- Stabilize the timing of Purchase Orders - PO's are now generated on a predefined basis.
With Diamond Fastener's unique ability to customize a program that best suits the customer's needs, there is full optimization of work flows.
For more information regarding VMI please contact Diamond Fasteners for any questions.