There are a number of factors that contribute to a successful custom VMI program, but perhaps the most critical in achieving the program’s goal of reducing operating cost and working capital is a thoughtfully designed and well-executed implementation plan – one that includes:
- Parts Requirements: An understanding of the projected parts consumption and the current supplier inventory pipeline
- Sourcing Plan: A practical strategy for sourcing parts, both imported and domestic, with long lead-times
- Quality Plan: An agreement on the quality requirements and inspection of parts, and the Production Part Approval Process (PPAP)
- Transition Plan: An agreement on the program takeover strategy – what’s best for you: “flipping the switch” to the new program or a gradual transition from the existing program?
With this kind of process in place we’re able to successfully implement custom VMI programs even in highly complex situations, like these two examples, both of which resulted in timely startups at all plants involved: