Vendor managed inventory

Typically if a customer needs a product, they place an order with a manufacturer (vendor). The customer is in total control of the timing and size of the order being placed and maintains the inventory plan.

With Vendor Managed Inventory (VMI) the vendor receives electronic data that informs him of the customer stock levels. The vendor is responsible for creating and maintaining the inventory plan.

Under VMI, the vendor generates the shipment for the replenishment, not the customer. VMI does not change the "ownership" of the inventory. It remains as it did prior to VMI. If VMI is combined with consignment stock the ownership of the stored material at the customer location goes over to the vendor. The customer only pays by consumpion.

VMI is always based on cooperation between vendor (manufacturer or distributor) and a customer. It must be considered as one component of a demand driven supply chain. We talk about VMI when we operate on the Distribution side of a company. The vendor takes over the responsibility for maintaining customer Inventory. This eliminates routine, repetitive purchasing activities for both the customer and the vendor who is providing the program.

The motivating factors for both partners to run a VMI business model are:

	More transparent processes along the supply chain
	Reduction of inventory to lower the employed capital
	Reduction of safety stock, higher availability with less risk
	Better forecasting and demand planning
	Better control of downstream process in production- and inventory managment
	Early detection of delivery shortage, minimization of delivery fluctuation
	Better utilization of resources, avoid spikes in production and distribution
	Less disturbance of processes through changes in orders
	Improved customer relationship due to highly intergrated logisitcal processes
	Less Process costs due to elimination of : - Material Planning and Disposition - Order processing and tracking - Inventory Monitoring and -management

Service we provide our customers with the necessary information systems and tools beyond the required hardware solutions in the field to run a business model like VMI. Whereas our measuring devices are the point of action creating the required information, Fieldgate is a web based telemetry system which transmits the information worldwide. SupplyCare^® Hosting is the subsequent step bringing business intelligence to the entire solution.

With the SupplyCare^® Application Service, we enable manufacturers or distributors to provide a service to their customers, resulting in optimized delivery- and quantity performance, as well as reduced order handling time. The improvement of these key factors do not only create a higher level of customer satisfaction, but also increase the overall productivity. This has a direct influence on the Return on Capital Employed.

SupplyCare Hosting Service collects data and presents them via Internet browser, no additional software required. In addition, we can transfer the data in a format which can be used for B2B data exchange. The common standard is CIDX (Chemical Industry Data Exchange).

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The overall offering in the Field of VMI applications includes:

	Measurement instrumentation
	Telemetry hardware
	Data integration into ERP systems
	Hosting of Internet Application Service
	Customer support for all system related issues
	Field, application and technical support
	Project management for installation
	Installation and start up services
	Lifecycle Support

Fieldgates provide world-wide remote monitoring, remote diagnosis and remote configuration of HART^® and PROFIBUS^® sensors via Ethernet TCP/IP, telephone lines (analogue) or mobile communications (GSM). Measured values become available world-wide via the Internet and can be analysed in a standard web browser without additional software.

	Fieldgate FXA320 (4…20 mA)
	Fieldgate FXA520 (HART)
	Fieldgate FXA720 (PROFIBUS)

Download supplementary ducumentation:

SupplyCare Enterprise SCE30

Software solution - online inventory data for

material management and logistics

Innovation brochure

IN004S/04/en/05.07

Inventory Control

Transparency in your bulk inventory to optimise

your business operations

Field of Activities

FA003V/00/en/04.04