Big data for big distribution
Big data is a term used to refer to data sets that are too large or complex for traditional data-processing application software to adequately deal with. Originally, big data was associated with three key concepts: volume, variety, and velocity. Interestingly, whilst big data now encompasses a plethora of other terms, volume, variety and velocity remain the fundamental metrics used within Vendor Managed Inventory (VMI).
Essentially, VMI streamlines inventory management and order fulfilment and helps both retailers, manufacturers and distributors to better predict what stock will be required (variety), where and in what quantity it will be needed (volume and variety) and when it will be needed (velocity). The VMI process starts with the customer sending a Product Activity Report containing demand information such as sales and transfers, along with inventory position information for the items that have changed since the last report. The VMI solution analyses the data and creates recommended replenishment orders to be sent to the supplier.
Through a process of collaborative replenishment, VMI helps companies to increase inventory turnover by up to 25%. For retailers, this equates to a significant increase in the amount of times their inventory is sold per year and for distributors this means 25% less capital tied up in inventory on the shelf.
The landscape is becoming increasingly competitive, with supply chain efficiency often signifying a company’s diligence. The ability to utilise the varied data we have at our disposal when trying to attain a competitive advantage and build competitive infrastructure, leverage efficient logistics and synchronise supply with demand can depend on your ability to accurately predict and meet future requirements. VMI helps you to do this.