The Diagnostic Analysis Of H Company Vendor Managed Inventory VMI Management Model Establishment

With the increasingly fierce competition in industry nowadays and improve customerexpectations, business competition has been converted into the supply chain competition.How to use supply chain management to improve competition, how to connect all aspects ofsuppliers and customers, has become the business goals and the basis strategy of company.Inventory management is important, because it related to the whole process of the supplychain. Too much inventory, will occupy the liquidity funds of the company and make highpressure to the funds and cost. However, reduce inventory levels may easily cause materialshortage and customer complaint.Vendor managed inventory (Vendor Managed Inventory, VMI) can optimize inventorymanagement, also upgrade the reflect speed of the entire supply chain, to achieve a win-winsituation for the upstream and downstream enterprises.In this article, it’s based on theory of vendor managed inventory (VMI) to study theproblems that need to be considered in strategy. In actual, we use H company as the studyobject, H Company is a well-known automotive brake pad manufacturer, through analysis ofits basic situation and current mode of operation and the problems of its supply chainmanagement, improve the feasibility of the program and issues raised by the implementationof VMI, then by contrast the changes in stock indicators before and after the implementation,as well as target evaluation. Finally, it concluded the effectiveness and necessity of VMIimplementation in H Company.Each enterprise’s has its own hardware and software limitations, VMI implementationmust be combined with the actual situation of the enterprise, explore how to break theshackles of the original ideas and the old rules, flexible and effective implementation of VMIis very critical.