VMI Program Improves Forecasting & Supply Chain—Arasco’s Case Study

VMI PROGRAM IMPROVES FORECASTING & SUPPLY CHAIN—ARASCO’S CASE STUDY By Shaik Abdul Khadar A vendor inventory management (VMI) program not only improves forecasts and supply chain but it also creates visibility in the supply chain … trust between a vendor and its customers is the key to success … to win the support of customers for a VMI program, it is important that they fully understand its benefits. A A vendor managed inventory program (VMI) is an important collaborative initiative in a supply chain to improve visibility as well as forecasting. In this article we show how Arasco integrated its supply chain within the framework of a VMI program. WHY VMI? A collaborative initiative, such as a vendor managed inventory (VMI) program, can reduce costs, improve customer service, and increase sales. It also helps build a strategic alliance between the customer (distributor) and the vendor (manufacturer), which is very important to both. With this approach, a vendor continuously and automatically replenishes its trading partner’s inventory by predicting its customer’s demand. Electronic data interchange (EDI) serves as a crucial link between the trading partners. ...