[NEXT LEVEL BLOG]

With the opening of global markets and expanded trade agreements, securing, training, and utilizing quality low-cost suppliers in the supply chain has become a targeted strategy to reduce costs and open up opportunities for market expansion. However, there are often situations where local sourcing is the best choice for supply chain stability and lowering total delivered cost. Focusing on piece price is the single greatest mistake procurement and operations managers can make in determining the optimal supplier mix.

Seth Swanner, Vice President of Sales and Marketing of Supply Technologies, shares his views on the industry and the dangers concerned with “custom” VMI programs that are being marketed by many competitors.

In my earlier blog post I discussed some of the key aspects involved in deciding on the right vendor managed inventory (VMI) program for your business – because the last thing your company needs to do is incur additional costs moving into a program that was initially supposed to save you money. In taking it a step further, I’d like to outline some of the benefits realized when your VMI program is developed based on the specific needs and processes of your organization rather than built around an off-the-shelf solution.

• Better consumption control and parts velocity management

• Reduced costs across multiple areas of your business

• Improved cash flow through creative programs such as “pay on consumption”

• Resource reallocation opportunities to focus on other key initiatives within your supply chain

• Improved time management/efficiency

• Improved quality standards and component traceability

• Minimized and mitigated inventory liability

• Reduced interruptions on production lines

• Increased manufacturing square footage and production floor space

• Streamlined Just-In-Time (JIT) solution for your production floor team 

Seth Swanner, Vice President of Sales and Marketing of Supply Technologies, shares his views on his industry and the dangers concerned with “Custom” VMI Programs being marketed by many competitors. 

Vendor Managed Inventory programs (VMI programs) have become an extremely important tool in global supply chain operations. Many companies offer these types of value-added services, but very few can do this process well. The risk of a large scale transition from one supplier to another is far too great and creates potential exposure if either the new supplier is unable to accomplish such a task, or they work hard to implement a VMI program that isn’t truly customized to meet the current challenges of your organization. This is especially true for companies operating on a global scale. Before listening to the well-prepared rhetoric that most VMI suppliers are sharing, take time to investigate the following: