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PROS
Flow
Pull
Striving for excellence
System
y
will be less
100%
99%
90%
Service Level
Increase in Buffer
Stock for over 99% of
service level
50%
Buffer Stock
9
STRATEGY 2:
Standardization,Variety Reduction &
Codification
10
11
12
STRATEGY 4: Vendor
Managed
g Inventoryy ((VMI))
14
15
At customer sites
16
Advantages of VMI
Customer
less resources for inventory
management
assurance that product will be
available when required
q
Vendor
more freedom in when & how to
manufacture product and make
deliveries
better coordination of inventory levels
at different customers
better coordination of deliveries to
decrease transportation cost
17
VMI Essentials
TRUST
TECHNOLOGY
19
JIT Purchasing
Characteristics of JIT Purchasing-
20
JIT Purchasing
21
Supplier Relationships
Long-term, steady relationships with a few suppliers.
Negotiation based on a long term commitment to
22
23
Supplier
Production
Trucking
Transport
Inspection
Packing
Storage
Shi i
Shipping
Transport
Receiving
Inspection
Storage
Production
Traditional
Customer
Production
Just-in-Time
24
Lean Logistics
Replacement of expendable packaging with
reusable containers
Frequent deliveries made to the point of use
Regular and repeatable delivery schedules
25
Lean Logistics
Long-term dedicated contract carriage replaces
26
STRATEGY 7:
CENTRALISATION OF
STOCKING
27
Supplier
Warehouses
Retailers
Centralized Systems
Supplier
Warehouse
Retailers
29
30
10
31
32
Required date
KL
ORD
L
Order Released
Date (ORD)
33
11
Project site#1
Decentralized store#2
Project site#2
Supplier
Project site#1
Supplier
Centralized
store
Project site#235
expensive
p
spares:
p
Turbine rotor
Project site#1
Supplier
Centralized
store
Project site#236
12
37
reverse gear
39
13
14