This study is about SCM strategy of which purpose is to improve company's competitiveness of distribution by revitalizing the VMI system, through giving distributors and manufactures who want to adapt alternative plans to settle successfully and devic...
This study is about SCM strategy of which purpose is to improve company's competitiveness of distribution by revitalizing the VMI system, through giving distributors and manufactures who want to adapt alternative plans to settle successfully and device to reduce or exterminate trial error in real operation case.
These are the chief elements in success of VMI operation proved by former research that sharing information, active cooperation, stability of the system, constantly faithful relationship formation. The former factors in the middle of introducing system are that participation and support of CEO, member's understanding and sympathy of VMI system, information sharing at the same time, standardization of information system, building EDI & POS system, clear establishment in terms of contract and strategic partnership.
Based on the chief element of success and essential conditions, this thesis analyzed VMI actual operation in manufacture enterprise (‘K’, D’ Co.)and whole sale mart ('S', 'L'Co) cases. After thean analysis, problems in operation expected effects and development plans are summarized as follows
First, in manufacture enterprises, aversion to leak business information, rapidly increasing demand, changing production plans by inaccurate information of stocks, lacking reliability of Key Performance Indicator(KPI) and connection between VMI system and old one are common problems. And in distribute enterprises, separated demand expectation, passing the buck to external factors about fluctuation in demand, weakening control to enterprises, carring a burden of lost sale, problem of stock management and frequent price fluctuations are the common problems.
Second, positive effect of operating VMI system as an aspect of manufacture enterprise is improvement of productivity, long-term demand holding, real-time acquisition of selling data, diminution of remaining stock and distribution cost, shortening Lead-Time and increase of delivery rate.
Third, positive effects of operating VMI system as an aspect of distribute enterprise are stabilization of supplying goods by synchronizing information in plan about promote sales and production, reducing the number of days stockpile remained by eliminating Bullwhip Effect, increasing sales by improving client order satisfaction and improvement of customer service. It is found in S and L's operation case study.
Fourth, sharing information and cooperation by constructing confidence and collaboration system based on honesty, sincerity and certainty are the most important devices for manufacturers and distributors.
Distributors should make high accessibility to sales volume in real time, provide marketing and financial information, and minimize returning goods and abuse of status. Also sharing responsibility and requital by making sure a contract, education and training to a staff in charge, a fair management in KPI, key role of EDI and POS in VMI operation, these are found to work requisites in this case.
For reducing stockpiles, growing quality & quantity in manufacture enterprise and curtailing expenses, there are four alternative plans; 1) order production in assembling production system 2) constructing a quality guaranteed system 3) JIT production by receiving order 4) operation efficiency and inefficient resource management by standard time-management. Efficient management of Line Balance is also important to improve and to divide equally of working hours. Because fluctuation in demand has a great effect on deciding Lead Time to the total stock, VMI has a important position in open and aboveboard management. And it finally works like a window to see into all Supply Chain.
For enhancing customer service by making minimum drawback and increasing delivery goods, sharing information of production, stockpile, selling in real-time, developing overnight delivery systems and Cross-Docking system, sharing information about hallmark and new product development projects, increasing localization of purchasing materials are important things to do.
Fifth, It can be a win-win strategy to make a success manufacturers and distributors that clear contract and standardization of system for making the best supply chain, storage·loading and unloading, packing, standardization of distribution accounts, making full use of EDI/RFID and expansion and recycling of Unit-Load System, building a eco-friendly reverse logistics system about returning, recovery goods and wastes. VMI should make true partnership based on reliance, not based on one side sacrifice. And it finally should make reciprocity relationship.
In conclusion, VMI operation can expect removal of uncertainty, shortening of lead time, diminishing the rang of supply and demand fluctuation, saving distribution cost for cutting down the stockpile and 'better customer service' by a strategic partnership construction. And it shows a correspondence with a strategic goal of SCM.