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Part - V
Four Stages of the Fully Automated VMI Model
The four stages of this model are: -
- Collaboration
- Planning
- Execution
- Assessment
Benefits of VMI
There are several Benefits of VMI for both Manufacturer & Retailer.
The AMR findings on VMI benefits are shown in the following table: -
| Manufacturer Benefits |
Typical Improvements |
| Lower Inventory levels |
30% |
| Lower Transportation Cost |
10% |
| Lower Warehousing Cost |
13% |
| Lower Lead times |
50% |
| Better Customer Service |
>10% |
| Retailers Benefits |
Typical Improvements |
| Better Store Shelf Stock Rate |
5% to 8% |
| Lower Inventory levels |
10% |
| Higher Sales |
8% to 10% |
| Lower Logistics Costs |
3% to 4% |
Source, AMR Research, VICS, and IBM IT Logistek NR 6, 1999.
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* Contributed by -
Sarang Aparajit,
PGDIE Class of 2005,
NITIE, Mumbai.
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