Foxconn, Vmi Management Research. Multi-variety Small Batch Production Mode

Due to the changes of global supply chain and end consumer's consuming habits,the manufacturing system must make changes as well,such as VMI (Vendor Managed Inventory),which has been applied in the electronic manufacturing industry for many years. VMI has brought numerous economic benefits to EMS (Electronics Manufacturing Service),particularly in the reduction of stock capital.However,the application of VMI has also faced with the problem of adapting current operation mechanism to the transition of production mode to'High Mix,Low volume'within recent years,and continuously enlarging its economic efficiency. Based on the studies of published literatures,the present writer makes a case study of Foxconn VMI management,and brings forward the following schemes which can improve VMI management under the'High Mix,Low volume'production model:1.Improving the present restock strategies and raising stock turnover rate to have a better control of VMI inventory: the computational logic for VMI Min/Max needs to be revised,making it approximately close to the actual requirement,which can meet ordinary requirements of all the BUs in Foxconn,meanwhile,let suppliers restock enough goods at a suitable time,reducing the possibility of excess inventory.2. The adjustment of supply chain and simplification of current operation procedures: abolishing unnecessary and nitty-gritty details of VMI distribution,realizing the direct-distribution of raw materials to production line; simplifying current operation procedures to shorten supply chain period and enhance its compatibility.3. The improvement of management information system: applying the above-mentioned improvement strategies into updated information system with an overall deployment,which will make it capable of sharing information among VMI,Suppliers and BU on the same platform,and realizing'One screen total visibility'and'Post-Occupancy Paid'.