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Final CRP and Vmi

The document discusses Continuous Replenishment Programs (CRP) and Vendor Managed Inventory (VMI) systems. CRP is a partnership between manufacturers and suppliers to improve inventory management and information sharing through electronic data interchange. It uses sales forecasts and historical data to calculate daily demand and stock levels. VMI takes inventory management a step further by having suppliers make decisions about optimal stock levels for each product based on retailer sales data. Both systems aim to reduce costs by decreasing stockouts, improving fill rates, and optimizing inventory levels throughout the supply chain.

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305 views3 pages

Final CRP and Vmi

The document discusses Continuous Replenishment Programs (CRP) and Vendor Managed Inventory (VMI) systems. CRP is a partnership between manufacturers and suppliers to improve inventory management and information sharing through electronic data interchange. It uses sales forecasts and historical data to calculate daily demand and stock levels. VMI takes inventory management a step further by having suppliers make decisions about optimal stock levels for each product based on retailer sales data. Both systems aim to reduce costs by decreasing stockouts, improving fill rates, and optimizing inventory levels throughout the supply chain.

Uploaded by

kamsjagan
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOC, PDF, TXT or read online on Scribd
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Continuous Replenishment Program (CRP) :

It is a partnership between manufacturer and supplier targeted for inventory management and control of information orders to buy / sell, which is assumed as an asset in regarding the exchange of information through the Electronic Data Interchange ( EDI ). It is essential to creating strong partnership relations in order to improve results and reduce costs operating.

Fundamentals of CRP :

Based on the history of the product , the CRP creates a daily forecast of demand is calculated and the level of stock for the security providers in each outlet. The comparison between the stock in retail outlets and sales forecasts, purchase orders result established by the program. The sales forecasts are made based on historical product, as well as current sales, trends and even seasonality. The purpose is that each day after the closure of retail outlets, all the information about them is shared by computer with the producer and thus enable it to have a lower uncertainty about the demand and achieve customer satisfaction.

After analyzing this information, the supplier has a greater power of response, both in the management of stocks in the management of its transport . On completion of this process through EDI , the requests are processed for the retailer , also reported getting information from the planning of production.

Continuous Replenishment consists of three stages. First one has to determine the order to be placed for each product based on the sales, which are registered at the cash register. Then the order has to be processed correctly at the warehouse. Finally the goods have to be delivered. These stages have to be well coordinated in order to reduce errors and to create a continuous process.

Benefits of CRP:

Reduction of stock levels; Improved service levels; Increased number of sales; Reduction in the costs order; Reduction of returned products.

Vendor Managed Inventory:


Vendor Managed Inventory (VMI) is a streamlined approach to inventory management and order fulfillment. The VMI is part of the supply chain as a way of establishing of real collaboration and sharing of information between suppliers and their customers (e.g. distributor, retailer, or product end user) which changes the traditional ordering process. This not only reduces the level of stock along the chain and provides a cost of reduction, In this system of vendor Management Inventory, the supplier makes decisions about the level of stocks most suitable for each product. Examples: Global & Indian Co. using VMI Wal-Mart(distributor) and Proctor & Gamble(vendor)
Godrej(manufacturer) & Boyce(vendor)

Benefits

Customer benefits:

Fill rates from the supplier, and to the end consumer, improve. Stockouts and inventory levels often decrease. Reduced costs for order processing Improved level of service..

Draw Backs of VMI :


EDI Problems Employee Acceptance Trust among supply chain partners.

References
Retrieved on April 16th , 2012, from http://en.wikipedia.org/wiki/crp Retrieved on April 16th , 2012, from http://pt.wikipedia.org/wiki/VMI

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