Tag Archive: accelerated cash flow

VMI – What are the Benefits?

June 6th, 2017
vendor managed inventory

Vendor Managed Inventory is gaining in popularity as people realize the many benefits of supply chain collaboration.

Vendor managed inventory (VMI) can have many benefits – both from a strategic perspective and a tactical one. We are seeing that it is gaining in popularity as manufacturers and distributors and retail locations see the value of collaborating with supply chain partners to drive dramatic benefit across the supply chain.

Why VMI? See these 5 benefits:

1. Increased revenue– By partnering with customers on VMI and customer collaboration programs, you become a trusted and value-added partner. As new business opportunities arise, we’ve found that those who offer VMI typically have an advantage. First, the customer knows they will have what they need, where they need it and when they need it to satisfy demand. Next, the customer knows it is easy to work with a VMI partner and so will prefer to expand capabilities with them. And, lastly, the customer is likely to recognize these preferred suppliers.

2. Responsiveness & agility– By collaborating up and down your supply chain, you build a greater agility and responsiveness into your supply chain. With a greater access to information and a quicker view of market changes, responsiveness will increase throughout.

3. Improved customer service & reduced lead times– Often, this is the most critical benefit across the board. With VMI, there is better collaboration, information-sharing and visibility. In every client project, we dramatically improved service levels and reduced lead times.

4. Accelerated cash flow– As inventory is managed across the supply chain, inventory levels can be reduced while service is maintained or improved. We have frequently reduced inventory levels to the customers’ target level while reducing supplier inventory by 20-60%.

5. Improved margins– As the supplier is able to plan across the supply chain, he/she is able to optimize transportation, warehousing and production efficiencies internally while meeting service and inventory targets for the customer. We have seen rather significant improvements (around 20%) by pursuing this opportunity.

Did you like this article? Continue reading on how to strengthen your Eagle Eye:

4 Keys to VMI

Cross-Supply Chain Opportunities



Involve Your Supply Chain for SIOP Success

May 18th, 2016
Involve your supply chain for SIOP success

For greater success with your SIOP process reach out to your extended supply chain for collaborative ordering, product development opportunities, and logistics improvements.

The best SIOP (Sales, Inventory & Operations Planning) processes that deliver significant returns on investment involve the extended supply chain. Since SIOP is about how to align demand with supply – and align all the process owners and executives on one page, it has far reaching implications beyond any one project, person or result.

I find the most successful SIOP processes deliver the optimal combination of:

  • Business growth backed by operational readiness
  • Improved customer service levels
  • Accelerated cash flow
  • Increased margins

Thus, it is a worth-while endeavor for any business as not only a way to stay competitive but it is also a strategic process to grow the business and rise above your competitors with elevated business performance.

Although a certain level of success can be achieved within the “walls” of your company, far greater success will be achieved by involving your supply chain. Talk with your customers about demand. Consider collaborative ordering processes with them as you’ll gain a greater insight into your supply chain that can be utilized to achieve a win-win!  Find out which products are strategic and think through pricing and costing. Partner with suppliers to develop improved materials, to design products, to collaborate on inventory and ordering and more.  Go beyond the norm and tie your customers and suppliers together in a win-win-win endeavor. And, consider other supply chain and business partners – transportation providers, trusted advisors and the like.  Find a way to make 1+1=16.

If you’d like to learn more about how to implement these types of advanced SIOP techniques in your organization, our proprietary model, 4 EXCEL has proven effective.  Contact me to discuss further.

Did you like this article? Continue reading on how to be the Strongest Link in your organization:

4 Excel for SIOP Success

Customer Collaboration on Orders = RESULTS