What are the inventory management methods in the supply chain? What are these methods?

First, the necessity of innovative traditional inventory control methods

In recent years, more and more attention has been paid to supply chain management at home and abroad, and many logistics enterprises have begun to pay attention to the application of this new management concept in inventory management. The so-called supply chain management is based on various technologies, especially information technology, to establish a strategic partnership between all nodes of the supply chain, and to realize the unimpeded flow of business, logistics, information and capital from raw material suppliers, manufacturers, distributors and retailers to end users in the whole supply chain, and finally achieve the goal of win-win or even win-win.

In the environment of supply chain management, the activities of all links in the supply chain should be carried out at the same time, but the traditional inventory and distribution management ideas obviously can not meet this requirement. Because in the traditional supply chain, enterprises based on all aspects of the transaction relationship manage their own inventory, and under the premise of maximizing their own interests, each enterprise independently formulates its own inventory objectives and corresponding inventory control strategies. This isolated operation leads to the lack of information communication between enterprises, which inevitably leads to the distortion and time lag of demand information, which often makes the inventory demand information amplified step by step in the process of transmission from the downstream to the upstream of the supply chain, thus greatly increasing the overall inventory of the supply chain. The goal of supply chain management is to provide the maximum customer value at the lowest cost through the close cooperation between its node enterprises, which requires all enterprises in the supply chain to carry out activities at the same time and integrate the inventory management functions as necessary. In this way, enterprises should change from logistics-oriented inventory management to process-oriented inventory management, that is, the inventory management of supply chain is based on workflow management. Vendor managed inventory (VMI) is an inventory management model that meets the requirements of market changes, and embodies the idea of supply chain integration.

Second, the connotation and characteristics of VMI model

Vendor Managed Inventory (VMI), translated as "Vendor Managed Inventory", is a cooperative strategy between users and suppliers. Specifically, it is a cooperative strategy for both users and suppliers to obtain the lowest cost. The supplier manages the inventory under a * * * agreement, constantly monitors the implementation of the agreement, and corrects the contents of the agreement, so that the inventory management can be continuously improved.

Compared with the traditional inventory control method, VMI mode has the following characteristics: ① Cooperation. The successful implementation of VMI model objectively requires enterprises in the supply chain to cooperate closely on the basis of mutual trust. Among them, trust is the foundation and cooperation is the guarantee. 2 mutual benefit. VMI mode mainly considers how to reduce the inventory cost of both parties through cooperation, rather than how to share the cost burden of both parties. 3 interaction. VMI mode requires all node enterprises to take a positive attitude in cooperation and try to reduce the problem of high inventory cost caused by poor information with quick response. 4 agreement. The implementation of VMI mode requires enterprises to reach an agreement in concept and clarify their respective responsibilities and obligations. Specific cooperation matters are clearly stipulated in the framework agreement to improve the feasibility of operation.

Third, the reasons for choosing VMI mode

So why can VMI become the best choice of inventory control mode in supply chain management environment? In other words, what are its advantages?

1. is conducive to achieving a win-win situation for upstream and downstream enterprises in the supply chain.

The benefits of VMI to the downstream enterprises in the supply chain are obvious, which overcomes the limitations of the downstream enterprises' own technology and information systems. With the rapid development of the core business of enterprises in all aspects of the supply chain, the upstream of the supply chain also puts forward higher requirements for the downstream logistics management (including inventory management): after the implementation of VMI, the inventory will be managed by the upstream enterprises of the supply chain, and the downstream enterprises can freely develop their core business. At the same time, VMI can also meet the needs of downstream enterprises to reduce costs and improve service quality. Compared with downstream enterprises managing their own inventory, suppliers are more experienced and professional in managing their own products. Suppliers can provide a series of services including software, professional knowledge, logistics equipment and personnel training. The service level of enterprises in the supply chain will be improved because of VMI, the cost of inventory management will be reduced, and the inventory investment of downstream enterprises will be greatly reduced. In this way, the implementation of VMI will bring many benefits to the suppliers of upstream enterprises in the supply chain. VMI allows suppliers to obtain the necessary business data of downstream enterprises and directly contact the real demand information (transmitted through EDI). This information can help suppliers eliminate the extra cost caused by unexpected short-term product demand. At the same time, the enterprise's demand for safety inventory has also been greatly reduced. On the other hand, VMI can greatly shorten the transaction time between supply and demand sides, enable upstream enterprises to better control their own production and operation activities, and improve the flexibility of the whole supply chain.

2.VMI model has the unique function of reducing the "negative" of supply chain.

In essence, the management idea of VMI model comes from the whole process management idea of product market, that is, as long as a product is not bought by the final consumer and consumed satisfactorily, then the product cannot be counted as sold and constitutes a potential risk in supply, and suppliers also have the responsibility to monitor the circulation of the product, regardless of the ownership of the product. It is based on this idea that VMI takes the supplier's mastery of sales data and inventory as a solution for market forecasting and inventory replenishment, and can obtain accurate consumer demand information from sales data. In this way, suppliers can respond to market changes and consumer demand more effectively and quickly, share important information with downstream enterprises in the supply chain, and improve their respective demand forecasting, replenishment planning, promotion management and transportation loading planning. For the whole supply chain, it can reduce the total inventory and improve the inventory turnover rate, thus maintaining the optimal inventory and significantly improving the inventory management level.

Fourthly, the operation of VMI mode.

Suppose in a simple supply chain environment, the supply chain is supplier → wholesaler → retailer → consumer. Enterprises can operate VMI mode from the following aspects.

1. Infrastructure. From the VMI model above, we can see that in order to truly realize the supplier's management of user's inventory, the following conditions must be met: First, the user's inventory status is transparent, that is, the supplier's or retailer's inventory status can be tracked and viewed at any time. The second is the standardization of business processing, which mainly refers to the standardization of order business processing. Therefore, if suppliers want to implement VMI for their users, they must carry out some technical support construction on VMI.

With the increasing popularity of the Internet, suppliers can connect with the Internet through high-speed data lines and their own intranet through routers, and then the servers in the intranet provide various information access and processing services for the inventory management department of suppliers. In addition, suppliers should also use bar code technology and ID code to encode their own goods, and obtain the logo code of goods, such as EAN or UCC, so as to realize accurate identification of users' goods, so as to track and check users' inventory status at any time and respond to users' needs quickly. In order to ensure the safety and reliability of order delivery and processing between suppliers and users, suppliers can use unified EDI messages for real-time data exchange of goods. Moreover, in order to improve the overall operation efficiency of the supply chain, suppliers can also use the inventory report list based on standard EDIFACT to implement inventory control, thus improving the monitoring efficiency of suppliers on users' inventory.

2. Establish a special user management functional department. After the supplier implements VMI, in order to integrate the user's inventory control function, it is necessary to separate the user management function from the traditional financial management department, which is specially used to handle the ordering business between suppliers and users, the supplier's inventory control to users and other related businesses.

3. Establish a target framework agreement between suppliers and users. Suppliers should negotiate with users to determine the core issues related to inventory control, such as inventory inspection cycle, inventory maintenance level, order point, and how to exchange and obtain information, order delivery and processing.

4. Establish a perfect sales management system. In order to effectively manage users' inventory, suppliers must be able to quickly understand the market demand dynamics and commodity demand information, so as to replenish commodities in a targeted and timely manner, which can not only speed up suppliers' response to users' needs, but also reduce users' inventory. Therefore, on the one hand, suppliers can quickly grasp the changes of customer demand, enhance the accuracy of demand forecasting and analysis, and solve the problem of excessive inventory caused by "demand amplification effect" to some extent; On the other hand, suppliers can use ERP system software (enterprise resource planning system) and Internet/Intranet technology to establish a perfect sales network management system to speed up the information transmission and real-time processing in the supply chain.

Verb (abbreviation of verb) Matters needing attention in implementing VMI mode

On the one hand, we should pay attention to the scope of application of VMI model. This paper mainly discusses the feasibility of implementing VMI mode in enterprises under supply chain management mode. Generally speaking, it is more suitable for the implementation of VMI mode in some specific circumstances, such as suppliers with strong economic strength, strong inventory storage, cargo transportation and distribution capabilities, and stable and reliable information sources; The inventory facilities of wholesalers are limited, which makes it difficult to effectively manage inventory; The cooperation between suppliers and wholesalers is close. On the other hand, in the process of implementing VMI model, we should pay attention to cooperate with other advanced inventory control methods to minimize inventory costs and improve the competitiveness of enterprises. For example, enterprises can adopt joint inventory management (mainly to solve the problem of high inventory caused by demand expansion) and multi-level inventory optimization control.