Vendor Managed Inventory Strategies
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1 Vendor Managed Inventory Strategies Summary Results 2015
2 Program Overview Between February and March of 2015, Gatepoint Research invited selected supply chain, logistics and operations executives to participate in a survey theme around Vendor Managed Inventory Strategies. Candidates were invited via and 100 executives participated. Management levels represented were predominantly senior decision makers: 6% held the title CxO, 45% were VPs, 47% were Directors, and 2% were Managers. Survey participants represented firms from a wide range of industries including General and High Tech Manufacturing, Retail, and Wholesale Trade. Responders worked for firms with a wide range of revenue levels: 73% were from FORTUNE 1000 companies, another 20% work for companies in the $500 million $1.5 million revenue range. 4% were from companies $250 million to $500 million; 3% work for companies with under $250 million in revenue. 100% of responders participated voluntarily; none were engaged using telemarketing. Summary Results 2015
3 Observations and Conclusions Vendor Managed Inventory (VMI) is not in use at all by 28% of survey respondents. Using VMI on both buy side and sell side is relatively rare. Only 27% of those surveyed report this capability; most (51%) apply VMI only on the buy side. A third of respondents rated their visibility levels between average and none. Great visibility into current inventory levels is only claimed by 26% of respondents. Only 21% report B2B integration between inventory systems. Inventory information sharing between partners is usually limited to ERP or manual methods. 33% of those surveyed felt their inventory management system achieved optimum cost and service levels. 59% report inventory turns are only on par or worse than industry averages. There s demand for better inventory management collaboration. Among those surveyed, 31% reported collaborating poorly or not very well with trading partners. Summary Results 2015
4 What types of Vendor Managed Inventory (VMI) are you currently using or planning to use? Consigned inventory at buyer s VMI location 49% VMI at third party logistics provider hub 30% Unallocated inventory stock at supplier virtual hubs None and no plans to implement 16% 18% None, but planning to implement in 6 12 months None, but early stages investigating options 0 6 months 6% 6% Other 4% 0% 10% 20% 30% 40% 50% 60% Almost half of respondents report their VMI strategy as consigned inventory at buyer s Summary VMI Results location % had no VMI at all.
5 Where in your supply chain do you employ VMI programs? Sell-side with fulfillment partners (distributors, retailers, etc) 22% Buy-side with suppliers 51% Both 27% Buy-side VMI programs outnumber sell-side programs more than Summary two to one. Results Only 27% 2015 employ both.
6 How do you rate the visibility into your current inventory levels? NO VISIBILITY 1 4% 2 9% 3 20% 4 32% GREAT VISIBILITY 5 26% 0% 5% 10% 15% 20% 25% 30% 35% 33% of survey respondents had none-to-average visibility into Summary their current Results inventory 2015 levels.
7 How do you and your partners share inventory information? Directly via our ERP system 45% Manually , fax, etc. 44% B2B integration between inventory systems 21% VAN or other data network 14% Other 5% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Reliance on ERP systems or manual communication to share inventory information with partners is typical. Just 21% have moved up to B2B Summary integration Results between systems. 2015
8 For these types of information, how timely is the information that you and your partners share? 60% 50% 48% 53% 40% 34% 30% 20% 10% 0% Forecast Inventory Order Information Daily batch (or faster) While 53% can share order information on a daily basis (or faster), two Summary thirds can t Results share daily 2015 forecast info.
9 Assess your ability to manage inventory levels. Too much cash tied up in inventory 36% Costs and service levels are optimized 33% Too much excess and/or obsolete inventory 29% Effective but too costly 20% No frequent stock outs and/or low service levels 20% Don t know 13% 0% 5% 10% 15% 20% 25% 30% 35% 40% A range of inventory level problems were reported only 33% felt that inventory levels Summary reflected Results optimized 2015 cost and service levels.
10 How do your inventory turns compare with your industry average? Don t know 17% Better 24% Worse 11% On par 48% For most respondents, inventory turns are only on par or Summary worse than Results industry 2015 averages.
11 How well do you collaborate with trading partners on inventory management processes? 50% 45% 47% 40% 35% 30% 25% 26% 20% 15% 10% 5% 12% 5% 9% 0% Very well Well Not very well Poorly Don t know 31% report below-average collaboration results with trading partners. Summary Results 2015
12 Profile of Respondents: Industry Sectors Retail Trade 16% Wholesale Trade 11% Other 4% Mfg - Primary 4% Mfg - High Tech 28% Mining 3% Mfg - General 28% Telecom Services 3% Financial Services 1% Healthcare 1% Business Services 1% Together, retail /wholesale trade and manufacturing (high tech and general) Summary comprise 83% Results of respondents. 2015
13 Profile of Respondents: Revenue $500 million - $1.5 billion 20% >$1.5billion 73% $ million 4% <$250 million 3% Almost three-quarters of survey respondents work for FORTUNE 1000 companies. Summary Results 2015
14 Profile of Respondents: Job Level CxO 6% Manager 2% VP 45% Director 47% 92% of those surveyed were senior management. Summary Results 2015
15 E2open is a leading provider of cloud-based, on-demand software solutions enabling enterprises to procure, manufacture, sell, and distribute products more efficiently through collaborative planning and execution across global trading networks. Enterprises use E2open solutions to gain visibility into and control over their trading networks through the real-time information, integrated business processes, and advanced analytics that E2open provides. E2open is headquartered in Foster City, California, with operations worldwide. Summary Results 2015
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