Does anyone know the operation process of VMI?

The so-called VMI(Vendor Managed Inventory) is a cooperative strategy, aiming at the lowest cost for both users and suppliers. The supplier manages the inventory under a * * * agreement, and constantly monitors the implementation of the agreement and modifies the content of the agreement, so that the inventory management can be continuously improved. This inventory management strategy breaks the traditional fragmented inventory management model. It embodies the integrated management idea of supply chain and adapts to the requirements of market changes. It is a new and representative idea of inventory management. At present, VMI plays a very important role in the distribution chain, so people pay more and more attention to it. Before implementing VMI, we should analyze and compare our own environment and conditions. The main factors to be considered are: the position of the enterprise in the supply chain, that is, whether it is a "core enterprise" or not, whether it is a vital enterprise in the supply chain. It requires that the implementing enterprises must have high-level talents and specialized user management departments to handle the ordering business between suppliers and users and the inventory control of suppliers to users. We must have strong strength to promote VMI, so that enterprises in the supply chain can implement the target framework agreements such as replenishment, distribution and information sharing according to its requirements. The position of enterprises in the supply chain. VMI is generally suitable for retail and manufacturing, the most typical examples are Wal-Mart and Dell Group. They have a * * * feature, that is, their position in the supply chain is very close to the final consumers, that is, at the end of the supply chain. One of the main reasons is that VMI can eliminate the bullwhip effect. A reputable partner. In the process of implementing VMI, retailers (manufacturers in manufacturing industry) are required to provide sales data, while suppliers are required to deliver goods to the places designated by customers on time and accurately, which is particularly demanding for manufacturers. The supply chain structure of VMI system is different because of the different positions of core enterprises in the supply chain, and it is generally divided into two categories according to the different positions of core enterprises. A. the downstream of the supply chain is the core enterprise; B. the upstream of the supply chain is the core enterprise. Because of the different status of core enterprises in VMI system, the cooperation mode between core enterprises and their partners is also different. For example, core enterprises generally choose self-operated logistics in the upstream, but they can choose self-operated logistics or outsourcing logistics in the downstream. This will lead to changes in the operational structure of VMI. Next, the corresponding operation modes will be proposed for A and B respectively. VMI operates as described above. In VMI system, the core enterprise can be in the upstream or downstream of the supply chain, and when it is in the downstream, it can be the middle link or the end of the supply chain. Obviously, the operation mode of VMI is different in different situations. There are three main situations: supplier-manufacturer (core), supplier-retailer (core) and core enterprise (generally manufacturer)-distributor (or retailer). The first two modes of operation are mainly discussed here, and the latter mode is only a supplement to the first two modes. Vendor-manufacturer VMI mode of operation in this mode of operation, in addition to being a core enterprise, generally has the following characteristics. The production scale is relatively large, and the production of manufacturers is generally stable, that is, the daily demand for spare parts or raw materials has not changed much; The number of spare parts that suppliers are required to supply at one time is relatively small, generally meeting 1 day, and some even for several hours; High frequency of supply, sometimes even two or three times a day; In order to maintain continuous production, it is generally not allowed to be out of stock, that is, the service level requires more than 99%. Because manufacturers in this mode must have dozens or even hundreds of suppliers to supply spare parts or raw materials. It is obviously not cost-effective for every supplier to set up a warehouse near the manufacturer. Joining VMI HUB has the following functions: buffering. Because a customer has to correspond to n suppliers, if the customer has a high demand for supply frequency, there may be multiple suppliers delivering goods at the same time. Because there is no arrangement in advance, there will be a chaotic unloading site, which will seriously affect the production order and bring inconvenience to the normal work of enterprises. With VMI HUB, professional escort can avoid the above phenomenon and play a buffering role. Increased in-depth service. Without VMI HUB, suppliers are independent of each other and the delivered goods are separated from each other. With VMI HUB, picking service will be provided before delivery. VMI HUB will distribute spare parts according to the requirements of manufacturers and the proportion of finished products, and then send them to manufacturers to improve their production efficiency. When VMI is implemented normally, not only the inventory information is required to be exchanged between supplier A and VMI HUB, but also the production plan, demand plan, purchase plan, historical consumption, replenishment plan, transportation plan, inventory situation and other information. The information exchange between manufacturer A and VMI HUB is complete, real-time and automatic. When the demand changes suddenly, for example, the sales volume of the manufacturer increases suddenly, and the inventory in VMI HUB can't meet the demand of the manufacturer in time, then the implementation structure of VMI changes accordingly. VMI HUB directly sends the replenishment plan to the supplier's information system. At this time, the supplier directly replenishes the goods to the manufacturer, saving time and cost. We call the supplier's behavior of replenishing goods directly to the manufacturer without going through VMI HUB. Vendor-Retailer VMI Operation Mode Typical Vendor-Retailer Inventory Management Process. When a retailer transmits sales and other related information to a supplier through EDI (usually the data of a replenishment cycle, such as 3 days or even 1 day), the supplier predicts the demand according to the received information, and then inputs the predicted information into the material requirements planning system (MRP). According to the existing inventory in the enterprise and the inventory in the retailer's warehouse, replenishment orders are generated, production plans are arranged and production is carried out. Finished products are stored, sorted, packaged and shipped to retailers. The difference between VMI operation mode of supplier-retailer and VMI operation mode of supplier-manufacturer is as follows: In the face of larger retailers, accounts payable as shown in Figure 4 may not necessarily be generated. Usually, large retailers require suppliers to pay only when their goods are actually sold, otherwise "accounts payable" will not be generated. This model generally does not need to establish VMI HUB as the central link. Because for retailers, the products supplied by two suppliers are independent of each other, and they don't need to be supplied at the same time in the same period of time, unlike manufacturers who need parts or raw materials to be obtained at the same time to generate a product. In the actual implementation process, the participation mode of third-party logistics enterprises sometimes requires the participation of third-party logistics service providers. The reasons are as follows: in the supplier-manufacturer model, the core competitiveness of both manufacturers and suppliers is mainly reflected in their manufacturing, not in logistics and distribution. Obviously, it is uneconomical for suppliers or manufacturers to manage VMI HUB. Under the supplier-retailer model, due to the variety of retail products of retailers, the geographical distance between suppliers and retailers is far, and the lead time of direct replenishment from suppliers to retailers is long, which is not conducive to accurate demand forecasting and responding to emergencies. The compromise of this problem is that the supplier rents or builds a warehouse near the retailer, which is responsible for supplying the retailer directly. Based on the above reasons, it is most appropriate for a highly specialized enterprise to manage this VMI hub or warehouse, and the most ideal object at this time is the "third-party logistics enterprise". Moreover, supply chain management emphasizes that all enterprises in the supply chain should play their core competitiveness, which is just suitable for third-party logistics enterprises to meet the requirements of this inventory operation mode and give play to their own characteristics and advantages. Core enterprise-distributor mode This mode takes the core enterprise as the supplier role in VMI, and its operation mode is basically the same as the first two modes. The core enterprise collects the sales information of each distributor and makes a forecast, and then manages and distributes the inventory of each distributor in a unified way according to the forecast results. Because there is only one supplier in this model, there is no problem of establishing a warehouse near the dealer. Core enterprises and distributors can arrange the distribution problems to distributors in a unified way according to the actual situation, and can ensure that each batch is delivered in an economic batch way, and the route of each distribution can be adjusted to the best distribution route.