Over-production waste is defined making things or performing actions that are not required now.
How VMI Services Reduce Over-Production Waste
VMI can only work for the components that are part of the program. For example, if an OEM’s production model is to build up safety stock for anticipated sales growth or to keep their production floor running and employees working…well, a VMI partner isn’t going to dictate or redefine those decisions. What it will do is guarantee the quantity of stock available to keep up with usage as agreed to by the customer and supplier. Once this agreement is understood, stock is only replenished upon use.
Production needs change, which is why communication is key to a successful VMI program. VMI is an ideal way for an OEM to remain nimble while mitigating risk in their supply chain.
The time that Purchasing gains with VMI services can be used to operate on a more strategic basis, opening more dialogue with sales and marketing on any anticipated contract wins or marketing promotions, etc. that could impact production. The more insight gained within the organization, the more effective and responsive production can become, ensuring higher customer satisfaction as it relates to on-time delivery.
Dedicated Account Management
High performing VMI programs utilize a dedicated account manager to learn the nuances of an OEM’s operations and act as a single point of contact to minimize communication issues. Falcon takes it a step further by designating a Client Advocate for each client. In addition to the common functions performed by a typical Account Manager, Falcon’s Client Advocates (CAs) handle sourcing, quoting, and inventory management, empowering them to make fast, and informed decisions.