Management idea of joint inventory management

In order to overcome the limitations of VMI system and avoid the bullwhip effect in traditional inventory control, Joint Management Inventory (JMI) came into being. To put it simply, JMI is an inventory management model developed on the basis of VMI, in which upstream and downstream enterprises balance rights and responsibilities and share risks. JMI embodies the new enterprise cooperation relationship of strategic suppliers Alliance, and emphasizes the mutually beneficial cooperation relationship among supply chain enterprises.

JMI further integrates the management of supply chain system into two coordination management centers, upstream and downstream. The supply and demand sides of inventory connection start from the concept of the whole supply chain and participate in it at the same time, making inventory plans to realize the synchronous operation of the supply chain, thus partially eliminating the supply chain inventory fluctuation caused by the uncertainty between supply chain links and the distortion of demand information. JMI implements a reasonable risk, cost and benefit balance mechanism in the supply chain, and establishes a reasonable inventory management risk prevention and sharing mechanism, a reasonable inventory cost and transportation cost sharing mechanism, and a benefit distribution mechanism corresponding to the risk cost. At the same time, it avoids the short-sighted behavior of both supply and demand sides and the emergence of local optimization of supply chain. Through the coordination management center, the supply and demand sides can share the demand information, thus improving the operation stability of the supply chain.