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Part - IX
The Organization Cultures, two party relationships and trust between them are the key drivers for VMI but generally it is a difficult task to achieve these parameters.
The Trust among supply chain partners is a crucial parameter for VMI but it is difficult for companies to build the trust among themselves.
The employee acceptance is very important for VMI solutions to give the results, which the organization wants.
Conclusion
VMI is not a new concept. In fact, the basic concept of automated inventory replenishment was there for more than last 30 years but it was restricted only to the retail and automotive manufacturing sector. VMI is now being implemented in consumer electronics and also other small companies due to its cost effective and easy implementation. However the trends are changing day by day so a change is definitely expected in VMI solutions also. There is some attempt going on in this direction also. The concepts such as Supplier Managed Inventory (SMI) or Joint Managed Inventory (JMI) are one and the same thing. However, whatever be the trend, the ultimate aim of any organization is to create wealth through innovation. The goal of any organization is cost reduction, Inventory level reduction and stock out avoidance in a Supply Chain. So Whether VMI will work or not will depend entirely on its Implementation. VMI is not just an installation but it is an Implementation of a culture among the organization. If implemented incorrectly it can prove to be a disaster for any organization but if managed properly will definitely provide companies a strong relationship to catch on and also an approach, which will be a collaborative one. This collaborative approach will change the way organizations are doing their businesses.
Concluded.
* Contributed by -
Sarang Aparajit,
PGDIE Class of 2005,
NITIE, Mumbai.
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