After several months of successfully managing inventory at Extreme Hike & Bike, Grace Shin receives an order that is nearly twice the typical amount from one of her customers, Bob’s Sports. While selling more products to Bob’s is wonderful news for the business, Grace is not prepared to handle such a huge spike in demand. She has only two weeks to fulfill an order that usually takes months for Extreme Hike & Bike to produce and ship. The team at Extreme Hike & Bike has to work overtime and pay for expedited shipping just to meet this order. A year later, Grace is frustrated because this erratic order pattern has continued, not only with Bob’s Sports, but with several other customers as well. Grace then learns about a program, vendor managed inventory (VMI), that she thinks will help successfully cope with this costly supply chain variability. She wonders whether VMI can apply to her supply chain and whether the potential benefits, in terms of lower inventory cost and improved service levels, will outweigh the risks. She understands that Bob’s Sports and Extreme Hike & Bike’s other customers will have similar questions if she asks them to work with her on a VMI program.
Consultants or leaders who want to successfully implement a VMI program and achieve its many benefits must understand the conditions under which VMI likely will succeed. They must know the different approaches to inventory ownership with VMI and the different ways to assign decision rights to the participating firms. They must also understand the common risks and benefits for all parties and the key performance indicators (KPIs) they will use to measure progress.
Does your organization experience supply chain disruptions and erratic demand patterns? Does it understand the opportunities provided by VMI and what its benefits and risks are? The Accenture Academy course An Introduction to Vendor Managed Inventory (VMI) can help you understand what VMI is, when it is likely to be successful, and what to watch out for when implementing and running the program.
Accenture Academy offers proven, cost-effective learning solutions for a more versatile workforce and a more agile organization. We provide a flexible learning approach that helps your people be more versatile and your entire organization be more agile in the marketplace. Curriculum includes Supply Chain Management, Finance, Procurement, Analytics, Leadership & Management and Specialty Skills.