Managing inventory is the key to any distribution or wholesale business. But you continually face a dilemma: the more stock you carry, the better you are able to respond to demand. But the less stock your carry, the lower your costs.
A solution widely used in the automotive sector, now being adopted by other industries, involves process automation so suppliers can share the burden.
IBS Supplier Delivery Schedules uses the UN data standard EDIFACT to send forecast information to your suppliers. They plan their production and delivery around your forecasts so that you can reduce inventory and therefore costs, without hindering your ability to meet customer demand.
IBS Supplier Delivery Schedules
In Supplier (or Vendor) Managed Inventory (SMI), our software sends suppliers sales statistics in the correct format, together with your stock on hand and max and min inventory levels. This is a gross forecast. The supplier’s system calculates which products are required and when. The supplier sorts out the order processing for you.
If you are not able to negotiate an SMI deal with your suppliers, or you would rather keep control over the ordering process, you can use a net forecast. You tell your suppliers what you want and when you want it in the standard data format. IBS’ Supplier Delivery Schedule software does it for you by monitoring your inventory and sales figures, and calculating the best time and quantities to order.
Either way, you can keep your inventory to a minimum and costs in control without losing that flexibility your customers look for.
Advanced Information Only
There is a third option which is to enhance the traditional ordering process by giving your suppliers advanced warning of you needs. This works just like a net forecast but the supplier does not treat it as an order. The forecast is for information only but the information will help the supplier to performe better planning that can reduce lead-time and perhaps even lower the purchase price. Purchases must be negotiated and confirmed in the normal way.
The standard data interchange ensures that delivery schedules are synchronised so there are no errors. Delivery schedules can also be published on the web using IBS Web Supply Manager.