S Vmi Applications

Since 1990s, people have gradually understood that the competition betweens companies depends more on the supply chain area. So SCM draws more and more attention from both industries and academic field. High-efficient SCM can help a company to build it core competency. While the inventory management is one inevitable sector and playing an important role in the enterprise whole operation, and it's also a key circle to provide the value chains. Obviously, the inventory volume has the impact to the total cost of sole enterprise by the supply chain management also impacts and restricts the function of whole supply chain. Vendor Managed Inventory (VMI), as a newly inventory management strategy, highly reflects the integrated SCM concept. Hence it's really an interesting topic to fulfill a VMI model effectively provided the project designed carefully and scientifically.The supply chain management is confronting with huge challenges for Electronic manufacturing Industry due to globalization, product diversity, and unpredictable needs, continuing shrinking product life cycle, as well as the pressure of lower cost and more demanding requirements from customers. One of critical challenge is on inventory control, as 80% of the cost of EMS is from raw material. That is why inventory level, inventory returns, inventory cost has direct impact on factory's total cost and profit margin.For EMS, low cost is one of key attractive factors of getting OEM business. However, the traditional inventory set up and management mode has put S company in a difficult situation on cost control which is caused by high inventory level, high obsolete inventory. The bull whip effect which was caused by inaccurate forecasting, barriers in communication between supplier and customer, information loss and communication lag has made the inventory problem worse than ever. S company has immediate needs for introducing more advanced inventory management method to maintain its leading position in the industry and its competitive power. VMI, an advance inventory control methods which were proved to be effective in many other companies became the solution to S company inventory problem.The successful VMI implementation requires carefully and scientifically designed VMI solution, a plenty of preparation. This dissertation firstly analyzed the root causes of the inventory problem in S company and recommended VMI method. Then this dissertation illustrated the study on IT infrastructure, vendor condition, China customs policy, the port and logistics park nearby and different customs clearing mode, based on which the VMI solutions including warehouse selection, logistics port and customs mode were recommended for different vendors. Next this dissertation studied the suitable VMI solution to S company, the preparation to implement VMI such as VMI procedure, VMI supplier and material scope, VMI agreement, supplier training, VMI team building and VMI process. By cases with several vendor such as Texas Instrument company and Arrow company, the dissertation continue to illustrate the advantages brought to S company, its vendor and its customer.The dissertation also record some improvement plan and solutions after an evaluation of the VMI solution after implementation and changing environments of S company. At last the author hope the success implementation of VMI in S company is a great contribution to the theory of VMI with valuable practical experiences and give some experience to China domestic EMS Company.