Barriers to implementing VMI
The process and principle of supplier management inventory is very simple, and it is not difficult to operate. Small printing companies can contact suppliers directly by phone, fax or mail. However, actual surveys show that it is generally difficult for small printing companies to reach agreements with suppliers to manage inventory. Large printing companies have some difficulties in applying suppliers to manage inventory with tight raw material suppliers.
Enhancing the inventory management level of both parties through cooperation is the main reason for applying suppliers to manage inventory. However, China's printing enterprise application suppliers manage inventory and supplier cooperation is not ideal. Taking paper raw material supply as an example, paper trade is a capital-intensive industry, and 1 ton of paper occupies tens of thousands of dollars. Paper suppliers are often reluctant to cooperate with printing companies to manage suppliers' inventory, mainly because printing companies often delay payment for goods. Large printing companies will reach 10-20 tons when they purchase, and often require a period of two to three months, and the price of paper raw materials has also increased in recent years. In 2005, global paper prices have risen to twice the past. Experts predict that paper will continue to rise in 2006. On the one hand, due to market competition, paper mills hope to maintain long-term cooperation with printing companies; on the other hand, paper mills are reluctant to bear the risk of rising raw materials alone, causing printing companies to complain that paper mills will increase prices during critical periods and thus distrust paper. The factory, this mutual suspicion creates a vicious circle that keeps printing companies in touch with many paper mills and is reluctant to form long-term partnerships with one or two paper mills.
In general, from the perspective of the printing company itself, the main reasons for not being able to cooperate with its suppliers for supplier management inventory are:
(1) The development strategy of the company itself.
(2) Enterprise resources are limited, and the cost of developing partnerships with suppliers is too high.
(3) The need to maintain core competitiveness.
(4) Suppliers will become potential competitors.
(5) The restriction of enterprise management level.
(6) I don't know what level of trust I have with suppliers.
From the supplier's point of view, the main reasons for not being able to cooperate with the company to manage the inventory of the supplier are as follows.
(1) The prospect of potential benefits in maintaining partnership with the company is not optimistic. It is believed that in the supplier management inventory model, the printing enterprise will pass the inventory cost on itself.
(2) Suppliers use their own advantages and use power to force suppliers. For example, suppliers are required to become dedicated suppliers of enterprises and cannot supply other companies.
(3) The history of cooperation is not pleasant.
(4) Does not have such a need.
Steps to implement VMI
1. VMI knowledge training for employees
The purpose of the training is mainly to let the employees of the company agree with the VMI and obtain the support of the corporate culture, especially the support of the middle and grassroots personnel of the enterprise. Their attitude determines the success or failure of the VMI implementation to some extent. VMI often leads to the reorganization of business processes and may impact their vested interests. Only the middle-level personnel recognize VMI, and the VMI management system formulated on this basis can be effective. Especially in the initial stage of VMI implementation, many systems cannot be perfect, and people need to cooperate consciously. If necessary, enterprises need foreign aid to formulate employees. VMI training program.
2. Form a multi-functional team
General VMI's product selection, decision-making process and supplier's standards are analyzed and discussed by a multi-functional team composed of the purchasing department, manufacturing department, finance department, quality assurance department, engineering department and other relevant personnel of the printing enterprise. The quantity and delivery frequency of VMI products are determined by the supplier's multi-functional team and the relevant personnel of the supplier after the historical usage data is provided by the supplier. This multi-functional team not only undertakes the task of analyzing inventory costs, but also needs to determine the supplier standards for joining VMI. Usually, the VMI is first started in a vendor that is familiar with the company and has been dealing with it for many years. Encouraging supplier reform is not only conducive to reducing unnecessary operating expenses, reducing the time and cost of developing production, but also helping to improve products.
Multi-functional teams can help suppliers improve coordination and reduce some internal waste. Through a collaborative work relationship, suppliers and printing companies can establish a common system to reduce waste.
In an emergency, when there is a problem with the supply of a key product, the printing company can send a multi-functional team to help the supplier solve this critical problem and provide long-term support to the supplier in order to achieve long-term improvement.
3. Establish a good evaluation system
Successful implementation of VMI also requires a good evaluation system, which is closely related to the organizational structure and information reporting channels of the enterprise. A good information channel enables enterprises to quickly understand the product cost, inventory level, inventory quantity and amount, etc. Evaluate the cost savings of implementing VMI, the responsiveness of inventory supply, stability, and the degree of supplier cooperation, etc., and obtain a comprehensive evaluation of the implementation of VMI.
4. Sign a framework agreement with the supplier
Printing companies first need to develop a rough inventory and supplementary plan, discuss which inventory types VMI contains, how many products should be managed, when to add new products, what tools suppliers use to deliver, where to build warehouses, and the area Does it guarantee the entry and exit of products and the growing demand for products; who will manage inventory on behalf of suppliers, and what standards do they need to achieve in terms of management capabilities, reputation, business scope and past experience, financial status, human resources, etc? How will the supplier meet the delivery time of all participants, the delivery location, how the inventory is delivered to the factory, how to ensure the safety of the inventory, the signature of the supplier when it is delivered, the inventory marking, etc., and the handling of the relevant documents need to be discussed carefully; Unit stock quantity, specifications, inventory entry and exit process, how to remove products from VMI or change unit delivery specifications, ownership of unit inventory products, participation in VMI supplier qualification standards, potential qualified supplier list, supplier training And exit plans; return terms, exceptions, payment terms, fines, etc.
The implementation of VMI requires the efforts of all participants. The framework agreement between the printing company and the supplier cannot cover all the possible situations, and the plan needs to be adjusted and updated regularly according to the situation completed by VMI. Once VMI is successfully used in the printing industry, the company will expand VMI management experience to other activity areas, and the cost savings brought by VMI will be unlimited.
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