Vendor managed inventory programs (VMIs) are an increasingly
necessary
component of the laboratory supply chain, providing cost
savings
and
peace of mind. In contrast to a traditional vendor-customer
relationship, where customers place orders on the basis of
their
calculated needs and the supplier subsequently fulfills
those
orders,
vendor managed inventory programs remove the burden from the
buyer.
Using a vendor managed inventory program, the inventory of
the
customer
is calibrated by the vendor, who measures the inventory
directly
and
then stocks the lab with an appropriate amount of each
needed
item.
While some lab managers and manufacturing executives may
hesitate
at the
idea of having a third party both place and fill the orders
for
necessary supplies, most are quickly won over by learning
more
about the
compelling features and benefits of leading VMIs. In
particular,
VMIs
are significantly more efficient than customer-managed
inventories,
thanks to the numerous economies of scale which suppliers
can
utilize.
Many laboratories experience robust cost savings—and more
productive
personnel—when they transition to using a vendor managed
inventory
program.
What's the Role of a Vendor Managed Inventory System?
From an industry perspective, VMIs are appealing for several
reasons.
First, they are a convenient way to keep laboratory personnel
focused on
tasks which are their core competency. Second, having an outside
vendor
manage a laboratory's resupply can decrease unexpected shortages of
supply. Finally, VMIs are effective at reducing the slack in the
supply
chain, which helps to save costs.
All vendor managed inventory programs:
-
Track the disposition and location of consumables which fall
under
the vendor's purview
-
Shift the burden of order sizing from the laboratory to the
supplier
-
Shift the problem of calculating replenishment frequency
from the
laboratory to the supplier
Tools Needed To Implement a Vendor Managed Inventory
System
The tools needed to take advantage of the benefits of a VMI include
software, delivery
infrastructure,
and inventory management personnel.
Most importantly, however, is the supply chain of the
supplier themselves.
Suppliers which can leverage their ties to manufacturers and their
clientele to make bulk orders can negotiate better prices, which
subsequently cuts costs for their customers. Similarly, suppliers
with a
powerful outbound logistics and delivery system can keep delivery
costs
low while providing exactly what their customers need, right when
they
need it.
Choosing a Vendor Managed Inventory System With Extra
Features
Picking the best VMI requires a basic familiarity with the
marketplace.
Not all suppliers are created equal, nor are all suppliers ready to
take
on new accounts of all sizes. Choose a VMI from a supplier that
offers
additional services to maximize cost savings and minimize supply
disruptions.
The extra features of the best vendor managed inventory
programs
may include:
-
A dedicated customer service and inventory management team
for
each account
-
Identifying cost savings opportunities in outbound shipping
operations
-
Help to identify opportunities for cost savings by changing
purchasing schedules
-
Providing personalized training for each account's personnel
- Rapid shipping to key regions
- Helping to setup initial inventory
- Suggest optimized storage configurations
- Protect inventory data from unauthorized access
- Provide customizable inventory reports
- Describe trends in SKU usagecess
In other words, the best VMIs have extra features which help them to
outshine the competition. In turn, the group outsourcing their
supply
chain operations will perform more efficiently, thereby increasing
their
competitive advantage within their industry as well.
The Five Things to Look Out For When Picking a Vendor
Managed Inventory System
Because of how significant a vendor managed inventory program can be
for
a growing company's bottom line, each of the elements separating the
best programs from the average programs are worth discussing in
detail.
Inventory management and forecasting
Keeping the
laboratory supply line
stocked with the right materials is difficult because predicting
demand for certain types of consumables is
very difficult. Even for fundamental laboratory items like
gloves,
wipes,
and aprons,
there can be unpredictable fluctuations in
usage—especially when training new personnel. The traditional
solution
to these fluctuations is to maintain a substantial buffer of extra
inventory. However, even with a buffer, maintaining enough essential
supplies for an organization as it grows can be very challenging.
To effectively model a laboratory's inventory utilization, VMIs
track
inventories over time and measure the fluctuation of goods within
the
inventory so as to schedule replenishment before supplies run out.
Because this tracking occurs on a regular schedule—sometimes as
frequently as once per day—any changes in the underlying utilization
rates within an organization are reflected immediately. This means
that
laboratories which use VMIs reduce the risk of running out of
necessities like gloves, even if they double their workforce in a
short
period of time.
The replenishment engine
The act of replenishing inventories is also much simpler with vendor
managed inventories. Laboratories frequently use their personnel to
perform replenishment operations. But the designated logistics
managers
are often wearing other hats at the same time. This means that
keeping
the inventory in a perpetual state of overflowing is frequently an
intentional but inefficient choice to avoid any chance of running
dry
for key supplies.
While this ubiquitous “pay, cram, and pray” method of stocking
inventories is effective at warding off shortages, many supplies
like
solvents
are flammable or otherwise dangerous. Because of laws
regulating the quantity of these chemicals that laboratories are
allowed
to have on hand, overstocking may be a liability legally. Aside from
properly calibrating inventory inflows against gluts or shortages,
VMIs
help companies to reduce the inefficiency of keeping too many
low-turnover supplies on hand. Laboratories can save on precious
floorspace as a result—and they might even get a few tips regarding
how
to optimize storage space to make access and resupply easier than
ever.
Efficient delivery systems
Effective VMIs keep lead time extremely low, because lowering lead
time reduces inefficiency in the supply chain. On-time and on-
schedule delivery of supplies is at the heart of every vendor
managed
inventory program. However, the delivery operation can’t stop at
being
on time; frequently, miscalculations or accidents require
unscheduled
deliveries of key
supplies on short notice. This means that the vendor
needs to have delivery resources which can be mobilized in response
to unforeseen demand
from customers. In other words, the delivery schedule needs to be
both perfectly reliable but
also extremely flexible.
When inventory is managed by an outside party, it also means that
the customer can gain
access to faster turnaround than they would be able to get from a
manufacturer. Rather than
their customer being out of a
critical supply,
suppliers can modify the delivery schedule and
pass along the necessary goods. As a result, when customers urgently
need an unforeseen
resupply, the best VMIs have the delivery capabilities to get the
right products to where they
need to go on a timescale where the delivery can benefit the
customer.
More cost savings
The cost savings provided by VMIs are numerous. Major areas of
cost savings with vendor managed inventories include:
- Lower inventory carrying costs
- Lower freight costs
- Lower transaction costs
- Lower shoe leather costs of inventory tracking and
replenishment
- Lower item costs per unit
- Lower reporting costs
- Lower personnel costs
Depending on the laboratory in question, the distribution of the
cost savings among these areas
may vary. For instance, smaller laboratories may benefit from lower
reporting costs and lower
personnel costs, whereas larger labs will reap the largest cost
savings from lower freight costs.
Increasing the ease of doing business
Finally, VMIs make maintaining the regular flow of business to be
significantly easier than customer-managed inventory systems. The
result of these features working in conjunction is that executives
use
less of their headspace trying to sort out day-to-day details while
laboratory staff can spend more of their time on their intended job.
Scaling operations upward is no longer a daunting matter of
logistical uncertainty but rather a question of efficiently
organizing
internal resources around goals—exactly the way that a dynamic
company should be.
Get Started With Vendor Managed Inventory Today With
The
“Be A Lab Pro” Program
For laboratories in California looking to maximize the efficiency
of
their laboratory operations and their supply chain while
freeing up
their essential personnel for critical labor, the “Be A Lab Pro”
vendor
managed inventory program from Lab Pro is the best choice in the
vendor
ecosystem. Thanks to Lab Pro's expertise within the scientific
supply
space, laboratories which get Lab Pro to handle their inventory
management will experience all of the benefits of the best VMIs,
including substantial cost savings.
California will always be Lab Pro's home, and serving the market in
California more effectively than anyone else is our mission.
Consequently, Lab Pro offers next day ground shipping in California
and
even same day shipping on selected items. This means that your
laboratory will never need to be out of an essential item ever
again—even when the unexpected happens.
For over 40 years, Lab Pro has been committed to providing
superior vendor-managed
inventory systems to laboratories in California and worldwide.
Come visit the biggest
Lab Supply showroom in California, or contact us online
or at 888-452-2776. to
inquire
about our “Be A Lab Pro” inventory management program.
