The Holy Grail of VMI:
The Ultimate Buyer – Supplier Collaboration
Presented by
Copyright 2016 Enhanced Retail Solutions LLC
1
Who is Enhanced Retail Solutions?
We provide a business intelligence platform to manufacturers, retailers and licensors that enable them to
uncover opportunities and liabilities that would otherwise go undetected and increase operational efficiencies.
New York, USA
Dallas, USA
Cork, Ireland
New Delhi, India
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What is VMI?
Vendor Managed Inventory is a
collaborative business model
where the retailer provides
product activity (such as an EDI
852) to a vendor to compare
against model stock for each
store location.
Once a vendor has this
information, they integrate it with
their wholesale ownership to
determine production needs,
what replenishment is needed by
store and creating reverse PO’s.
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What are the Benefits VMI?
• More Consistent Flow of Product
• Improved In-Stock
• Increased Sales and Profit
• Quicker Response Time to Trends
• More Accurate Forecasting
• Additional Set of Eyes and Resources
• Greater Visibility to Stock Position
• Enhanced Production Planning
• Less Risk for Buyer and Supplier
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VMI Responsibilities
Supplier
Buyer
Manage Wholesale Inventory
Manages Open to Buy
Manage Receipt Flow
Estimates Weekly Sales by Item
Calculates Needs to SKU by Store
Communicates Changes in SKU/Stores
Creates Reverse PO & Transmits to
Retailer
Communicates Promotional Plans, Etc.
Compares Estimates with Supplier’s
Compares Estimates with Buyer’s
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VMI:
THE GAME
VMI Set Up
VMI Set Up
VMI Set Up
Weekly Cycle
Weekly Cycle
Weekly Cycle
Weekly Cycle
VMI Replenishment Workflow
Start Here
EDI VAN
EDI or other PO
transmission
protocol enacted
to Retailer
Data Extract
Created
Weekly POS
Feed (Store Sales
& Inventory)
Daily Wholesale
Inventory Feed
from ERP
Database
User Approves
or Applies New
Scenarios,
System
Recalculates
System
Calculates
Replenishment
Quantity by
SKU/Store
Copyright 2016 Enhanced Retail Solutions LLC
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What is Required?
• POS Feed (usually EDI 852) with Sales and Inventory Fields
• Ability to Integrate Wholesale Inventory
• Retail Analytic Platform
• Inventory Management/Forecast System
• Visibility to Past, Present and Future
• Door Level Needs Calculator
• Know What Questions to Ask
• Speed and Flexibility
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Short & Long Term Objectives
Wholesale Needs
Planning Time
Item Needs
Store Needs
Quantity
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Wholesale Needs
Item “Ladder” Plan
Replenishment Calculator
Replenishment Calculator
TGT WOS:
CALC METHOD:
10
AVG OF LAST 4 & LAST 8 WEEKS SALES
Sales
On Hand
On Order/In Transit
Available to Ship:
1 WK AGO 2 WKS AGO 3 WKS AGO 4 WKS AGO 5 WKS AGO 6 WKS AGO 7 WKS AGO 8 WKS AGO 9 WKS AGO 10 WKS AGO 11 WKS AGO 12 WKS AGO
10
8
12
6
8
14
5
4
6
8
4
8
50
55
60
62
60
68
67
68
58
58
57
58
6
2
4 WK AVG ROS:
8 WK AVG ROS:
CALC AVG ROS:
AVG ANNUAL TOTAL:
9.0
8.4
8.7
452
Curve %
WK 1
1.3%
WK 2
1.4%
WK 3
1.2%
WK 4
1.3%
WK 5
1.4%
WK 6
1.5%
WK 7
1.4%
WK 8
1.3%
WK 9
1.2%
WK 10
1.4%
WK 11
1.3%
WK 12
1.1%
AVG ANNUAL X CURVE %:
TGT OH (SUM OF CURVE):
ACTUAL NEED (TGT OH - CURRENT OH - OO/IT):
ADJUSTED NEED (BASED ON USER SCENARIO):
5.9
60.5
4.5
2.0
6.3
5.4
5.9
6.3
6.8
6.3
5.9
5.4
6.3
5.9
5.0
Replenishment Calculator
BEFORE:
AFTER:
User changes parameters and system
recalculates needs.
Selected: $50,000 OTB constraint,
Remove Bottom stores
Click Run Update
Note the Current Replen Order Units
and Dollars have changed.
Replenishment Calculator
BEFORE
AFTER:
Visibility Up & Down & Side to Side
View by Group
View by Style
View by SKU/UPC
View by Store
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Visibility Up & Down & Side to Side
Shows WOS by Group, Ranges are Color Coded
Shows Only Items with WOS < 14
Shows where the $ are allocated by Group
Shows Only Items with WOS >20
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Thank You!
Jim Lewis
[email protected]
Founder & CEO
David Matsil
[email protected]
President, Business Development & Marketing