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Part - VI

Benefits from Manufacturer's Point of View

• Due to visibility of the inventory data the promotions can be easily incorporated into the inventory plan.

• The manufacturer can set priorities regarding the production and replenishment by having a look at the Stock Levels.

• The VMI Solutions gives visibility to the POS data of Distributors. This improves the forecasting accuracy of the manufacturer and resulted in to the reduced stock outs.

• The Manufacturer can plan for the replenishment based on priorities, which eliminates the routine replenishment.

• The distributor ordering errors are also reduced.

• The VMI solutions reduce the lead-time for manufacturer.

• The VMI solution increases the manufacturer's ROI.

Benefits from Distributor's Point of View

• The cost of planning and order cost decrease because the responsibilities shifted to the Manufacturer.

• The VMI solutions decrease the stock outs and the inventory levels and hence improves the fill rate.

• The manufacturer is more focused in providing good services to the distributors, which in turn help distributor and the entire business to build relationships.

• The VMI solutions provide the benefits of having the right material at right time thus improves the overall service level.

Dual Benefits

• The correct information about the stock helps both the parties to give better service to the end consumer.

• The purchase order generation time is also reduced. The purchase orders are now generated on the basis which is earlier defined.

• A good partnership is developed between the Distributor and the Manufacturer. This partnership helps both the parties to reach to the same consensus.

• Data entry errors are reduced due to electronic communications also the processing Speed is also improved.

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* Contributed by -
Sarang Aparajit,
PGDIE Class of 2005,
NITIE, Mumbai.