Global Trading Essay
Providing services that allow material to successfully navigate customs regulations providing optimal cycle time and lowest cost. When entering into VMI arrangements listed below are the benefits the customer receives: 1. Operating a shared warehouse for a supplier from where the manufacturer can procure parts with the shortest delivery lead time. 2. Ensuring that stock counts and values meet agreed accuracy level avoiding any production disruption for the manufacturer. 3. Continuous early warning on any possible deficiency to planned stock levels,
material procurement and material moves to ensure a hassle free production. 4. Smooth and fully controlled flow of materials from supplier to consumer. 5. Multi-supplier owned stock available for manufacturer reduces working capital. VMI concept provides continuous flow of “sales” for suppliers. 6. Guaranteeing a hassle free flow of components into production lines significantly reducing production stop risks. 7. Optimize cost on trading and avoid incurring unnecessary taxes, duties and penalties. Is a vendor managed inventory system compatible with a lean JIT Supply
Chain design? Just-in-time (JIT) manufacturing means producing the necessary items in necessary quantities at the necessary time. It is a philosophy of continuous improvement in which non-value-adding activities (or wastes) are identified and removed. Putting this concept into
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• I believe that both JIT and VMI are good programs depending on the business. I believe that they are both compatible in some ways but if I was running a business I think I would prefer the JIT system just because they don’t make or ship more parts than are needed and only ship when needed which reduces waste. What is the role of information technology and process mapping when implementing a VMI arrangement? Document your discussion with illustrations from the experiences of Eka Chemicals and Interfast described in the background readings.
Information technology (IT), as defined by the Information Technology Association of America (ITAA), is “the study, design, development, implementation, support or management of computer-based information systems, particularly software applications and computer hardware. “ IT deals with the use of electronic computers and computer software to convert, store, protect, process, transmit, and securely retrieve information. Process mapping helps represent the work processes visually and identify problem areas and opportunities for process improvement.
It provides a common understanding of the entire process and specific roles and contributions of process participants. When it comes to Eka Chemicals Information Technology is very important. The industrial IT manager for Eka Chemicals, the company replenishes chemicals held in customers’ storage tanks based on automatically generated “suggested orders” triggered by a network of systems-stretching from GE Fanuc Proficy applications to an SAP enterprise suite and an Eka Chemicals custom-built and designed terminal located at customers’ plants.
Eka Chemicals can help its customers achieve a 10-percent reduction in inventory levels. Eka Chemicals also ensure that the customers chemicals never run dry, they also receive, verify and unload the product. Customers only pay for the chemicals they actually use. When it comes to Process Mapping the company must know what the type of paper that is made because and how much chemicals is needed a day, week or month because calculation of production and transport lead times also plays a critical part in the decision process. Usage of the chemicals that Eka supplies is dependent upon the
paper grade a customer is running at a particular point in time, and the speed at which the paper machine is running. Interfast has developed many supply chain system offerings the company started then with a focus on vendor-managed inventories (VMI), but today, Interfast uses, lean tools to integrate within a customer. Its delivery solutions include custom kitting, subassembly, VMI, customized inventory management and bin replenishment – each designed to meet quality, timing and cost expectations. Interfast tries to get input from the company of things they would like fixed, so
before they go in offering products they look at the complete process the customer go through from start to finish to get a better understanding of what can be offered and done. After they assess all the steps a team from Interfast and the customer meet several times to discuss the customer dream supply chain. The next step is to analyze if their goal can be met. One method Interfast uses, for example, is a vendor-managed inventory that eliminates the procurement function. Scanning equipment and electronic kanban orientation allow Interfast workers to look for a bin that’s short in stock and scan it.
That scan automatically uploads directly into the Interfast mainframe, which prompts replenishment the very next day. The company also puts emphasis on tools such as customized kitting, where a series of parts is assembled for whatever the customer uses in its bill of material.
http://www. vendormanagedinventory. com/article3. php http://www. vendormanagedinventory. com/article6. php http://www. vendormanagedinventory. com/benefits. php http://www. datalliance. com/whydovmi. html http://en. wikipedia. org/wiki/Just-in-time_(business)