WHAT IS THIS TOOL?
This tool has been around for many years. It has evolved since the early 20th century. It was a stock replenishment methodology for retail enterprises. It then evolved into “System Contracting” methodology for standard materials (hardware, food etc..).
It is being employed primarily by distributors to aide their customers – but only a few have employed it well. It’s practical process methodologies make it a powerful tool in enterprises needing improvements to ensure better performance with their customers.
V/SMI intent is to provide benefits to both the customer & the supplier.
- CUSTOMER BENEFITS:
- Reduced inventory
- Reduced operating costs
- Total Cost reduced
- Fewer suppliers
- Purchasing & administrative costs
- Shorter cycle time
- Greater customer satisfaction
- SUPPLIER BENEFITS:
- Increased volume
- Forces disciplines
- Better planning and resource use
- Visibility by resource sharing
- Need to eliminate or reduce non-value-added activities
This looks phenomenal! Why aren’t more organization employing it?
Today’s supply chain issues are forcing us to look at more reliable methods that can be readily employed. However, the initiative must come from a group of functions with the knowledge of how to do such.
It’s an old practice that was employed by few organizations that never touted the benefits because of minimal publicity and few publications. We will describe through a series of articles how to get to the successful employment of this tool.
Little known successful applications:
- Wal-Mart (Quick Response Program)
- Santa Cruz Boardwalk Enterprises
- Bose (Unique Planning)
- Rohm-Haas (MRO)
- Shamrock Supply (Integrator)
- Shell (Unique)
- Contract Manufacturing (various)
Look for the subsequent series:
- HOW TO PREPARE
- HOW TO IMPLEMENT THE PROGRAM
- HOW TO MAINTAIN THE RESULTS