FloChem Ltd.
Vendor Managed Inventory
DEFINITION OF VENDOR MANAGED INVENTORY
Vendor Managed Inventory: A means of optimizing Supply Chain performance in which FloChem™ is responsible for maintaining the customer's inventory levels.
FloChem™ has access to the customer’s inventory data and is responsible for generating purchase orders. To further define it, let’s look at two business models:
TYPICAL BUSINESS MODEL
Under the typical business model, when a customer needs product they place an order with FloChem™. The customer is in total control of the timing and size of the order being placed. The customer maintains the inventory plan.
VENDOR MANAGED INVENTORY MODEL
With a Vendor Managed Inventory (VMI) model, FloChem™ receives electronic data from a satellite that relays the customer's stock levels. FloChem™ is responsible for creating and maintaining the inventory plan and under VMI FloChem™ generates the order rather than the customer and confirms delivery date.
BENEFITS OF VENDOR MANAGED INVENTORY
The Benefits of VMI are numerous for both FloChem™ and the Customer.
Dual Benefits
• No phone or internet required. All you need is simply a 110V to "Plug & Play".
• Data entry errors are reduced. Speed of the processing is also improved.
• Both parties are interested in giving better service. Having the correct amount of product in stock ready for use.
• A true partnership is formed between FloChem™ and the Customer. Both parties work closer together and strengthen their ties.
• Stabilize the timing of Purchase Orders - PO's are now generated on an as needed basis or blanket PO’s can also be used.
Customer Benefits
• The goal is to have an improvement in Fill Rates from FloChem™. Also, a decrease in stock outs and a potential decrease in inventory levels.
• FloChem™ will deliver less often resulting in fewer orders being received by your personnel.
• Planning and ordering costs will decrease due to the responsibility being shifted to FloChem™.
• The overall service level is improved by having the right product at the right time.
• FloChem™ is more focused than ever in providing great service.
• There is no cost to the customer, FloChem™ provides the satellite dish and electronic monitoring as a “Value-Added Service”
FloChem™ Benefits
• FloChem™ can better manage their distribution costs resulting in “Best Case” pricing to the customer.
• A reduction in customer ordering errors.
Source: http://www.flochem.com/vmi.html
Bulk Chemical Loader
At Flochem, the Bulk Chemical Loader is responsible for loading Chemical tanker trailers and on-site storage tanks.