VMI Is Based On Improved Inventory Management Company AS

The performance of supply chain has a huge impact on the performance of enterprises. Supply chain management has a lot of core indicators, of which, a very important indicator is stock. The effective management of inventory is therefore a key area for consideration. Stock management requires a careful balance:On one hand companies want to increase the inventory to improve production efficiency and customer response level, and reduce cost through bulk purchasing. Conversely low inventory levels are desirable to reduce, space, management and cash flow demands.With the development of supply chain management, enterprises endeavor to minimize the total cost of inventory and maximize customer service levels. Under this background, the concept of inventory management has changed dramatically, requiring enterprises not only to focus on their own inventory management, but also to the inventory control of the entire supply chain.At present, small and medium sized manufacturing enterprises, including those manufacturers of solar hot water collectors, continue to implement traditional inventory management methods. Distributors and manufactures maintain lots of inventory to deal with fluctuating demand, while implementing their own inventory control strategies. This increases inventory costs and business risk and drives down profits, leading to a weakening of the company’s core competitiveness. Indeed this approach results in inefficiency through the entire supply chain.In this paper, AS is a medium sized company which focuses on the research and utilization of the solar thermal. In this company supply and stock related problems exists both from upstream suppliers and downstream distribution customers.This article has the following main areas of research:Firstly, the paper reviews the supply chain management theory. Secondly, based on the theory of the inventory management, the paper focuses on an analysis of Vendor Managed Inventory (VMI). This model involves provision of stock from suppliers based on production planning and material requirements though effective inventory management. This cooperative strategy can improve the inventory management level and optimize the cost of the supply chain and provide a win-win for both the company and supplier. This model is suitable for the current management and development strategies of AS. This is also a reference for other solar energy manufacturers and small and medium sized manufacturing enterprises to implement VMI management.