How Do Manufacturers Transitionto VMI Logistics in Canada?With the rising competition and the challenges in managing supplychains, a good number of Canadian manufacturers are relying on VMIlogistics solutions for manufacturers in Canada as the way to go toenhance their operational efficiency. Vendor Managed Inventory (VMI)is a practice in which the responsibility of the monitoring, replenishing,and optimizing of the inventory is shifted to the supplier or the logisticspartner rather than the manufacturer.But the question arises, how do manufacturers move to VendorManaged Inventory Canada programs without any hurdles? The path issure-footed of strategic planning, technology integration, and solidpartnerships.1. Evaluate Existing Supply Chain Procedures
The first thing to do is to look into the manufacturer’s present inventorymodel. The firms are required to take demand patterns, SKUperformance rates, carrying costs, and replenishment challenges intoaccount. This diagnostic phase will be helpful in finding out if VMIsupply chain management is going to solve the company’s troublessuch as stockouts, oversupply, and long lead times.2. Pick the Best VMI PartnerThe success of a transition to VMI depends heavily on the selection of asupplier or a logistics partner that can handle the inventory very well.Some companies go for Canadian 3PL VMI services as their futurepartner and avail themselves of the advanced forecasting tools, realtime visibility, and nationwide warehousing networks that come with it.3. Integrate Technology and Data Sharing SystemsThe VMI model of the future is technology-based. Transitioning to VMIrequires the manufacturer’s ERP and the provider’s inventorymanagement platforms to be completely integrated. Sharing data inreal-time makes it possible to have reliable demand forecasting,automatic stock filling, and better planning of demand. The connectionmade digitally is very important for the use of VMI as a logistic solutionfor manufacturers in Canada, especially for those with severallocations.4. Conduct a Pilot ProgramBefore VMI is completely implemented, a majority of the manufacturersfirst test the entire concept through a pilot program that limits thenumber of SKUs or the area of a single facility. Such an experiment in acontrolled environment allows both the partners to operate with testeddata flows, assess inventory performance, spot process gaps, and makethe replenishment strategy even better.5. Scale and Continuously ImproveThe pilot project was a success then the VMI model can be applied tomore product lines or distribution centers. The continuousimprovement process is crucial “Analyzing data”,“modifying reorder
points” and “listing a feedback loop” are the determinants of long-termperformance and cost savingsRead Also: How Does a 3PL Support eCommerce Small BusinessGrowth?