1. Vendor Managed Inventory
Date
Vendor Managed Inventory
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2. Vendor Managed Inventory
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2. Update metrics where noted and delete green boxes when finalized.
Leveraging Greater Information Sharing to Reduce Supply Chain Costs, Increase Sales, and Improve Customer Satisfaction
Vendor Managed Inventory is the process where the supplier generates orders based on mutually agreed objectives and demand information sent by the customer.

3. Executive Summary
The internet has made sharing data easier, increasing the flow of data within and between organizations
Effective supply chains leverage information from as much of the chain as possible
Buyers and sellers need to be more closely aligned, creating a seamless buying process
Collaboration allows for smoother, more predictable replenishment
TrueCommerce Datalliance VMI provides a dramatic ROI: many benefits, low risk, modest investment
Distributor Quote

4. The Problem
The distributor and supplier have different sets of information
Both spend time and money trying to predict what the other will do
DISTRIBUTOR
SUPPLIER
The problem with traditional replenishment is that the distributor takes the information they have access to and places the order with the supplier. The supplier, in turn, has to produce in anticipation of what the distributor will order. There are employees at the distributor trying to guess how long it will take the supplier to get the new inventory to them and there are employees at the supplier trying to guess how much the distributor is going want. No matter how good these people are, they are operating with incomplete information and occasionally they are going to get it wrong. When that happens, it will be expensive for both organizations.
SALES
PUTAWAY
EVENTS
INVENTORY
PROMOTION
LEADTIME
PACKAGE SIZES
ITEM NUMBERS

5. The Solution
Communicate between supplier and distributor to create better orders and smoother demand pattern
Tighten relationships and align business goals
Increase visibility throughout supply chain to enable better resource planning
Use cloud-based solution to eliminate hardware costs
DISTRIBUTOR
SUPPLIER
In a perfect world one group of people would be in charge of this business interaction; one group with access to all of the data. Vendor Managed Inventory helps us do this. It does this by increasing our access to information. The first step is to get the product activity data from the distributor to build the orders. By combining our information, the distributor can reallocate resources to more value-added processes and we get greater visibility into the supply chain, improved efficiency, and increased sales.

6. 88% Productivity Reworked Orders
The impact on human capital is equally as impressive. We recently compiled insight from a number of our customers across industry groups and found that their planners physically re-work as much as 40% of their non-VMI generated orders. Compare that to their VMI-generated orders that require only 5% manual manipulation. That’s a productivity gain of 88%!

7. Benefits of Supplier VMI
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Benefits of Supplier VMI
31%
Out of Stocks
25%
Turns Up
24%
Sales Increase
Since starting our program we have seen . . .
Out-of-stocks decreased by 31% on average
Turns increased 25% on average
And sales grew 24% on average

8. The Value of Collaboration
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The Value of Collaboration
In Stock %
Turns
Weekly Sales
Traditional Replenishment
97%
4.0
$20,742
After 1 Year of VMI
98%
4.6
$26,456
Source: actual data from software vendor
Using more data allows for a higher in stock percentage
Better picture of supply chain increases turns
Greater customer service increases sale
By making the ordering process smarter we see that the distributor is in stock with our products more of the time while increasing their turns. These factors combine to make our sales higher at the distributors who are in our VMI program than they were before joining. We want to increase the number of distributors in the program so that we can gain a bigger benefit.
[Use the Period Comparison report to generate these numbers for your program.]

9. Predictable Replenishment
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Predictable Replenishment
This data is a placeholder, Datalliance does not have access to pre-VMI orders this should come from your ERP
Combining knowledge allows for more consistent order pattern
Fewer orders – especially emergency orders – reduces transactional costs
More frequent communication leads to higher service levels
Traditional Ordering
VMI 75 60
Orders per Year
Orders per Year

10. Enter your company name in place of “supplier” and their company name in place of “distributor” then delete this green bar
Supplier VMI Process
PRODUCT ACTIVITY
REVIEW
Distributor
Supplier
The genius behind the TrueCommerce Datalliance VMI process is the simplicity.
Every day, the distributor transmits to us their product activity file—in other words, their sales activity that reflects what they started the day with and what was their stocking position at the end of the day.
We use that information along with their historical activity to calculate their forecasted demand and generate a suggested order, which is then reviewed by the supplier’s planner.
Once the planner works through any exceptions alerted by our system, they launch the order which triggers a purchase order to the supplier and a P.O. acknowledgment to the distributor.
P.O. Acknowledgment
PURCHASE ORDER

11. Easy Implementation Distributor Steps * Provide daily product activity
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Distributor Steps
* Provide daily product activity
* Receive PO Acknowledgement
* Provide sales history
Easy Implementation
No Additional Hardware
Minimal IT involvement
No ERP Overhauls
Ongoing Supplier & TrueCommerce Datalliance Support

12. More service and support
Summary
Improve inventory turnover
Better cash flow, improved product mix
Increase service levels
Wholesaler in-stock to meet demand, reduce stockouts
Collaborative supply chain
Communication, vendor’s commitment to partner goals
More service and support