Vendor-Managed Inventory at NIBCO

908 words 4 pages
NIBCO has 100 years history and $ 400 million revenues. The main product is flow control like valves, fitting, and hangers so on. Compare to other same types of manufacturers, NIBCO wants to provide low price and differentiation of flow control products. In these days, the product quality is not only a requirement among the commodity markets. The value-added services also are good ways to attract more customers. However, when NIBCO wants to give value-added services to customers, the old system cannot suit their needs. The managers of NIBCO decided to use SAP R/3 implementation project, which helps them to deal with issues. From 1998 to 2001, SAP R/3 implementation has run smoothly in NIBCO. As a supply chain business processes, the …show more content…

2. Product order acknowledgement – is a confirmation that the order is booked/or received.
3. Advanced ship notice – is a notification of sending deliveries, similar to a packing list.
4. Invoice – is a commercial document issued by a seller to a buyer, indicating the products, quantities, and agreed prices for products or services the seller has provided the buyer.

Q3: What types of benefits have been attributed to the VMI initiative-for both NIBCO and NIBCO’s customers?
For the NIBCO, VMI initiative can be critical business measurements used by NIBCO to define whether the program is sold primarily on the basis of gross margin return on inventory (GMROI). Since the supplier is responsible for pre censorship of inventory and to avoid stock outs, it will make VMI-supported customer to stay in or out a contract for the long term. This action helps NIBCO not only keep their income stable and definable, but also decreases the risk that customers go to another supplier. Thus, NIBCO can monitor its customers’ inventory, at the same time it can schedule its operations more effectively and efficiently.
For the customers, NIBCO, now, is able to see if its customers are about to switch it with another supplier or not according to its absence of stockouts. Customers have clear sight about the NIBCO’s ability to restock the ordered goods without interrupting their operations. Therefore, customers can refit their needs since NIBCO has effective and