Just-in-time Inventory (JIT), Vendor Managed Inventory (VMI) and Customer Managed Inventory (CMI) are a few of the popular models being employed by organizations looking to have greater stock management control. JIT is a model which attempts to replenish inventory for organizations when the inventory is required. |
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The model attempts to avoid excess inventory and its associated costs. As a result, companies receive inventory only when the need for more stock is approachinVMI and CMI are two business models that adhere to the JIT inventory principles. VMI gives the vendor in a vendor/customer relationship the ability to monitor, plan and control inventory for their customers. Customers relinquish the order making responsibilities in exchange for timely inventory replenishment that increases organizational efficiency.CMI allows the customer to order and control their inventory from their vendors/suppliers. |
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Both VMI and CMI benefit the vendor as well as the customer. Vendors see a significant increase in sales due to increased inventory turns and cost savings realized by their customers, while customers realize similar benefits. |
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Stock management in the retail supply chain follows the following sequence |
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Request for new stock from stores to head office |
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Head office issues purchase orders to the vendor |
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Vendor ships the goods |
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Warehouse receives the goods |
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Warehouse stocks and distributes to the stores |
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Stores receive the goods |
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Goods are sold to customers at the stores |
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