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Challenges + Limitations of VMI

Challenges and Limitations of VMI

 

There are benefits for both retailer and supplier in setting up VMI programs with respective strategic partners.

The VMI process has challenges and limitations:

  • Not leveraging POS data for manufacturing insight
  • Shorting customers to prioritize VMI relationships
  • Insufficient integration results in incomplete visibility
  • High expectations from retailers
  • Resistance from salesforce
  • Skepticism from employees

Overcoming the Limitations

Effective implementation of VMI depends on overcoming the limitations and addressing concerns of stakeholders transparently. Some of the concerns can be addressed as explained below:

  • Ensure data is clean and automated (VAN, catalogs, etc.)
  • Consider an API-drive OMS+inventory system (EDI enabled).
  • Conduct simulations and pilots before actual implementation
  • Organize training sessions before launching VMI program
  • Set reasonable targets for benefits of VMI
  • Establish agreements on service levels and process to handle exceptions