What is a Vendor-Managed Inventory (VMI) Strategy?
A Vendor-Managed Inventory (VMI) strategy is a set of measures taken to improve inventory management in order to increase efficiency, reduce costs, and improve customer service. It involves allowing the supplier to manage and replenish inventory levels in order to optimize stock levels. This strategy typically involves a joint inventory forecasting system, automated replenishment processes, and supply chain analytics to provide increased visibility into the supply chain.
What's included in this Vendor-Managed Inventory (VMI) Strategy template?
- 3 focus areas
- 6 objectives
- 6 projects
- 6 KPIs
Each focus area has its own objectives, projects, and KPIs to ensure that the strategy is comprehensive and effective.
Who is the Vendor-Managed Inventory (VMI) Strategy template for?
The Vendor-Managed Inventory (VMI) Strategy template is designed for businesses looking to design strategies for vendor-managed inventory. It provides a clear, step-by-step guide to help create an effective strategy for decreasing inventory inefficiencies, increasing supplier collaboration, and monitoring supply chain performance. This template provides a comprehensive framework for businesses to follow for setting objectives, measuring KPIs, and implementing related projects to achieve their goals.
1. Define clear examples of your focus areas
Focus areas are the broad topics that your strategy will focus on. This template provides three focus areas that businesses can use to begin designing their strategy: Improve Inventory Management, Streamline Inventory Replenishment, and Monitor Supply Chain Performance. For each focus area, it is important to define objectives that will help to achieve the desired outcome.
2. Think about the objectives that could fall under that focus area
Objectives are the goals that you want to achieve in order to reach the desired outcome. For each focus area, you will need to define objectives that will help to achieve the desired outcome. These objectives should be specific and measurable so that progress can be tracked. Examples of some objectives for the focus area of Improve Inventory Management could be: Reduce inventory inefficiencies, and Increase supplier collaboration.
3. Set measurable targets (KPIs) to tackle the objective
Key Performance Indicators (KPIs) are metrics that can be used to track progress towards the objectives set for each focus area. KPIs should be specific, measurable, and have a target that can be achieved. This template provides initial and target values for each KPI, which can be adjusted to fit the needs of the business. An example of a KPI for the focus area of Improve Inventory Management could be: Reduce inventory overstock to 5%.
4. Implement related projects to achieve the KPIs
Projects are the actions taken to achieve the KPIs set for each focus area. These projects should be specific and measurable, and should have a target that can be achieved. This template provides suggested actions for each objective, but businesses are encouraged to adjust them to fit their needs. An example of a project related to Improve Inventory Management could be: Implement Vendor-Managed Inventory (VMI).
5. Utilize Cascade Strategy Execution Platform to see faster results from your strategy
Cascade is a strategy execution platform that helps businesses implement their strategies faster and more effectively. Cascade provides real-time visibility into strategy performance, allowing businesses to track progress and adjust their strategies quickly. With Cascade, businesses can see faster results from their strategy and make adjustments as needed.