Tag Archives: vendors

The “Merge-In-Transit”

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The concept of in-transit product merging-where, for example, two things are shipped from different locations and then married in transit so that they reach the customer as a single shipment-can be seen as a technique for reducing inventory if the need for the customer to simultaneously receive multiple SKUs is taken as a requirement. If the need for simultaneous receipt is a given, then the concept eliminates the need for inventorying the individual SKUs together. To some extent, merge-in-transit represents an extension of postponement beyond the distribution center walls.

Components are sourced from different manufacturing and/or warehousing locations. Components are received, temporarily stored awaiting order-completeness and consolidated in a Service Centre to be delivered as one complete order to the end customer. The solution combines components into one order while the goods are in transit.

The steps are as follows:

1. A customer requests the multi-component order.
2. Suppliers from all over the world send the components to a pre-designated Service Centre.
3. The components are temporarily stored in the Service Centre, and when all the components have arrived, they are merged into one shipment.
4. Lastly, the completed shipment is then sent to the customer who placed the order.

Often in business, companies have to use new methods in order to acquire goods, and the Merge-in-Transit has become commonplace in a market whose vendors are located in widely-separated and often disparate geographical locations. SIMMS Inventory Management software can help you with all of your manufacturing, ordering and assembly requirements. Visit www.simmssoftware.com or email sales@telus.net.

 

 

Lead Time

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Lead Time is the amount of time between the placing of an order and the availability, after the receipt, of the goods ordered. It is a major factor that needs to be taken into account in order to achieve inventory optimization, and its control is most advantageous for retailers and wholesalers. Lead times, however, typically are shown to vary when examined.

A few supply chain examples that exhibit a standard lead time are:

  • 3 months of lead time for an Asian manufacturer that has a warehouse in North America or Europe
  • 1 week of lead time for a wholesaler ordering to a local manufacturer
  • 1 day of lead time for next-day delivery for stores replenished by a regional warehouse.

A common principle is the longer the lead time, the higher the total inventory level. Total stock certainly includes inventory-on-hand in addition to inventory-on-order, and a longer lead time increases the dependence of the ordering company on using precise forecasts. To be sure, when next day delivery is available, an inaccurate order (too large or too small) can be fixed with two or three days by applying corrective measures. In the instance of shipments from overseas, inaccurate orders can penalize the business for six months or more.

In most companies, stock cannot be replenished immediately. Thus, to guarantee that the occurrence of stock-outs stay few and far between, demand planners need to anticipate how much stock is likely to be consumed between the current moment and the next replenishment, while also assuming that orders are passed right away. After all, one can expect that while items are in transit, stock levels will certainly be reduced.

One reason for varying your lead times is for stock-outs from your suppliers. When this occurs, suppliers have to wait until their own stock is replenished before shipping the items to you. Depending on their own lead times, suppliers’ stock-outs certainly can result in a dramatic increase of your lead time in comparison with the usual situation.

Another reason for varying your lead times, if they are measured in calendar days, is that suppliers may have a day or two closed every week (ex: no delivery during the week-end) which can increase the (calendar) lead time of respectively one or two days, and national holidays around the world can also increase the discrepancy between your lead time and special days on the calendar.

Standard safety stock models anticipate that lead time will be a constant that gets factored into calculations of optimized reorder points. To best optimize the process of making your lead time decisions, a comprehensive inventory management software is exactly what you need. SIMMS is the world’s leading stock software package. Visit www.simmssoftware.com or email sales@kcsi.ca today for more details how SIMMS best suits your needs.

Costing of Vendors

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SIMMS Inventory Management software provides a dynamic feature for controlling the numerous aspects of the process of Vendor Costing. Businesses often receive the same items from various vendors based upon their availability and best costs. With SIMMS, each item can be set with particular aliases (vendor-specific names or numbers) and separate costs for each vendor; this enables the user to choose at any time the vendor he/she wants following quick phone calls to the various vendors to ascertain if the item is in stock.

Users can combine multiple items needed from one particular vendor onto one particular purchase order, thus providing the fluidity of purchasing most companies require. The aliases allow for the accurate selection of items with their vendor-specific details, assuring that the items you need are clearly listed for your suppliers. Users can easily access references to the vendors used and edits needed can be performed quickly and easily.

As costs change and/or items pass from usage to be replaced by different or newer pieces, old costs and items can be amended or replaced smoothly, and lists of the new items can be produced in various report forms so your sales department can keep up with the pieces your company now offers. When combined with the seamless link between SIMMS’ inventory information and industry-standard accounting features, the addition or removal of stock pieces within the system give you count control and accurate financial information so you know where the bottom line is at all times. SIMMS’ Vendor Costing feature is just one more tool that will help you keep ahead of your competition. Visit www.simmssoftware.com or email sales@kcsi.ca today.

Lessening Distributors’ Concerns About VMI

Vendor Managed Inventory (VMI) can cause distributors serious concerns, which stem from the following anticipated predicaments from their particular point of view:

  • When there is a lower level of stock, there is more expected risk of disruptions due to bad weather, union or service strikes, and so forth.
  • Business can be adversely effected by the elimination of discounts, promotions, and/or forward buying
  • Stock is forced on them, causing disruptions and threatening the existing standard of confidence
  • Severe concern that the vendors may choose to forward integrate, and the distributors themselves get replaced or dropped entirely
  • Vendors reap the loins share as the distributors sacrifice their power of knowing the data that the retailers want.

If you are in a VMI relationship with distributors, the above worries must be rectified and addressed before implementation or amendments to established practices are finalized. You must realize that distributors in a VMI model can be your saving grace, and every beneficial relationship yuou have with them must be both reliable and fair.

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SIMMS’ Customer Manager

The details about your customers is of paramount importance towards both their satisfaction and your bottom line. They have their business to do, after all, and if you are focusing on their satisfaction and success as much as you focus on your own, then with every transaction you are building a wonderful relationship that can benefit the both of you for a very long time.

SIMMS 2012 has a comprehensive customer manager where all details and notes regarding your customers and your vendors — whose relationships with your company are also of extreme importance — can be established, maintained and augmented as each new transaction and mutual policy grow and change.

The following video outlines the ease and advantages in using SIMMS to manage both your tracking and your transactions:

SIMMS’ Customer Manager

Vendor-Managed Inventory

Vendor-Managed Inventory (VMI) has helped many companies to give their supply chain the edge that it needs. In this approach, vendors deliver specific quantities directly customers, putting to use data pulled from  through the distribution channel using data obtained from Just-in-Time Distribution (JITD, used widely in industries such as automobile), Efficient Consumer Response (ECR, used in apparel and grocery industries) and Electronic Data Interchange (EDI), instances of which can be found in the wide variety of industries that have employed the concept of VMI.

VMI seeks to first reduce and then eliminate stock-outs and its immediate advantage is that it lowers the quantity of inventory in the current supply chain, thus cutting expenses for the storage of stock.

Are Your Inventory Vendors Supplying You Fast Enough?

In today’s rapid requirements from your customers, you require equal or more speed from your suppliers. If you place an order from a supplier that gets promised in a week, your customer is waiting for that interval to get the goods from you. If it surpasses the allotted time, your customer will not wait; if your supplier takes longer, you would not wait for them either. In such cases, you would probably drop that vendor from your list of suppliers and get the items ASAP from someone else.

Any such dishonored purchase orders in your system can clutter up your paperwork in SIMMS, and possibly backlog items also ordered from them for other customers. Thus, one bad vendor can gum up the works for everyone.

SIMMS Inventory Management software can help cure this problem by allowing administators to set age limits for purachase orders, which, if they go past a certain age in the system, are automatically deleted to clear the decks for new orders from quicker vendors.

But if you place vendors — some of whom may be defaulted in the system as reliabe — all it will take is one cancelled order to remind them whom they value. If they want back in your company’s graces, they can earn it, exactly like any new vendor has to. This easily-set condition will lead to prime performance from your vendors and will make your company a reputation for reliabilty and leadership. This feature is just one of many features that SIMMS Inventory Management software can help supply for you in the conduct of your business. Contact KCSI today to learn more about how SIMMS can lead the charge for you as your prime inventory and management solution.

Using Aliases with Inventory Items — Happy Vendors and Satisfied Customers

With SIMMS, Item Aliases can be assigned, allowing users to make particular the aliases desired for each item either when ordering from your vendors or selling to your customers.

As purchase orders are created from a vendor, the alias unique to their catalog of stock will match the data on your order, guaranteeing that the exact items you order will be the ones they make sure you receive. As customers order from you, their reference item number or name is the alias you can assign to the stock in your warehouse, again contributing to the accuracy of their order since your sales order or invoice will reflect exactly the inventory pieces they need. you now have the capability of assigning your items as many aliases as you require, and relate your aliases to specific vendors and customers.

This additional level of accuracy is yet another leading feature that SIMMS Inventory Management System can provide for your business. Shipping and receiving personnel and sales and purchasing departments can operate with complete confidence knowing that they are dealing with the specific stock items that you and your customers require. Guess work and mere hope are replaced with precise knowledge and up-to-the-minute data. Utilize SIMMS’ Item Aliases feature to create both confidence and competence for your clients.