A Study On Inventory Management Tactic Of QSMC Based On Vendor Managed Inventory

Variety of products and the complex manufacturing processes leads the inventory in manyparts of Manufacturing. From raw materials, parts of the finished product, semi-finished productsto the finished parts, there are all kinds of inventory inside the factories. From raw materialsuppliers to distributors and sales markets are also with high lever of inventory. For long, greateremphasis is put on the sale of finished products than the inventory management of materials,semi-finished products and finished product. Worse more, inventory transfer and inventorycontrol between the corporations which is centered by the manufacturing corporation are mostignored. And this leads great problems in inventory management of the supply chain.According to the theory of inventory management and the actual situation of one of China’smanufacturing enterprise Quanta Shanghai Manufacturing City (we call it QSMC for short), thispaper points out the problems of supply chain inventory management in QSMC. Bullwhip effectexists in the supply chain with QSMC as the core enterprise, as well as QSMC faces a bigproblem of inventory management itself. The contradictions among supply of materials,production and demand of finished goods make the high cost of inventory. Further, the paperanalyzed the Internal and external key factors from theoretical analysis and practical researches,and then found that the feasibility of carrying out Vendor Managed Inventory (VMI). At the sametime, it proved that the VMI strategies are helpful to handle the problems discussed above. Onthe basis of this, the paper analyzed how to carry out the VMI in QSMC. In addition, the paperestablished an inventory cost model including many suppliers, one manufacturer and third-partylogistics warehouses included. This model apply VMI strategies to make the owned cost ofQSMC and its suppliers minimized and then calculated how to distribute the cost savings amongthe suppliers, QSMC and third-party logistics. Finally, this paper gave reasonable proposals tocarry out VMI policy and enforcement mechanism of supplier-manufacturer typed VMI tactic.Nowadays, competition is not the competition between corporations, but between supplychains. As the manufacturing plant in the world, the researches of supply chain are of practicalsignificance. For one thing, it helps to enhance the competitiveness of and the entire supply chainefficiency. For another thing, the opinions of how the improve the inventory management levelhas practical significance and reference value and in the meanwhile, it supply some reference tothe similar manufacturers.