October 13, 2010

Modern Distribution Management Interview: Common Pitfalls with VMI

Analyze & improve processes before automating: ‘Don’t pave the cow path’

Thomas A. Kozak, president of Pan-Pro LLC, presented “10 Ways to Not Benefit from VMI Programs” at the IDEA E-Biz Forum 2010, sharing lessons from his 36 years in supply channel optimization. Modern Distribution Management caught up with him after the Forum to delve deeper into the topic.

The weak economy has led to more companies looking for new ways to improve their bottom lines. Vendor Managed Inventory has been growing in popularity, but according to Kozak, president of Pan-Pro LLC, it is also easy to do wrong. Jenel Stelton-Holtmeier of MDM asked Kozak some questions about how to avoid the common pitfalls:

  • What do you think is the biggest or most common mistake companies make when implementing VMI programs?
  • How difficult is it to get the companies you work with, particularly their executives, to understand that it’s about new processes, not necessarily keeping to old processes?
  • At the E-Biz Forum, you mentioned that several companies approach VMI or SCO from an IT perspective. Could you expand a little bit on how businesses treat VMI as a technical endeavor? How should companies approach it?
  • What ongoing role does IT have?
  • What sort of metrics should be used to measure the effectiveness of a VMI program?

Read Kozak’s responses to these questions and much more in the MDM interview “Common Pitfalls with VMI” and download his Forum presentation from the 2010 Forum Resources page.

Content courtesy of Modern Distribution Management – read more and subscribe at www.mdm.com.