Business Dashboard: 4 Management Tips from Warren Buffett
Business Dashboard: 4 Management Tips from Warren Buffett
The billionaire Berkshire Hathaway CEO has offered some sage advice over the years. Every year, Berkshire Hathaway CEO Warren Buffett writes a letter to the company’s shareholders. Although the letter is mainly about performance of the business, it’s also packed with sage advice from Buffett’s 60-plus-year career. Here are some of his best management tips from the past decade.
1. Base decisions on business needs, not fads.
In his 2014 shareholder letter, Buffett wrote: “That old line, ‘The other guys is doing it, so we must as well,’ spells trouble in any business.”
2. Recognize your employees.
Every shareholder letter from the last decade ends with Buffett thanking his team. “I regularly extol the accomplishments of our operating managers,” he wrote in his 2011 letter. “They are truly All-Stars.”
3. Don’t surround yourself with enablers.
CEO’s keen to close a deal seldom seek dissenting views, Buffett wrote in 2020. “It would be an interesting exercise for a company to hire two ‘expert’ acquisition advisors, one pro and one con, to deliver his or her views on a proposed deal to the board.”
4. Prepare ahead to avoid debt.
“I never will operate Berkshire in a manner that depends on the kindness of strangers,” Buffett wrote in his 2017 letter. “Or even that of friends who may be facing liquidity problems of their own.” Instead, he suggests, build a cash reserve for lean times. Or, as the billionaire calls it, a “cookie jar” fund.
Buffett has employed a laissez-faire or free reign approach to managing his company. It’s a style that allows employees to carry out tasks without much guidance from leaders. Much freedom is given to the employees to make the right decision about what they are going to do. With Kechie™ ERP, management decisions can be swift and powerful with real-time information available at your fingertips. Let us help you make meaningful and prosperous management decisions to grow your business. Visit myofficeapps.com and schedule a demo today.
4 Free Management Tips From Warren Buffett’s Annual Shareholder Letters. (2020, March 4). Retrieved from Management Tips From Warren Buffett’s Annual Shareholder Letters
About My Office Apps, Inc.
My Office Apps, Inc. (MOA) is a leader in business improvement software solutions to automate your organization. Building on three decades of software design and development, MOA delivers Kechie™, a transformative business tool. Kechie is a fully integrated Enterprise Resource Planning Software as a Service (SaaS) platform with a simplified user experience and the latest in cloud technology. It is quick and easy to implement without the expensive price tag. Sold in separate packages – inventory and warehouse management (CRM, Sales, Procurement, Logistics included), manufacturing, finance – or a fully configured ERP system to include all of these individual tools. Kechie is easily configured to the scalable needs of your growing business. For more information on managing your business processes more efficiently and effectively, visit www.myofficeapps.com.
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World War 3.0: Humans vs. Artificial Intelligence
World War 3.0: Humans vs. Artificial Intelligence
Today, artificial intelligence is a household name and sometimes even a household presence. (Hi, Alexa!).
While artificial intelligence’s acceptance in mainstream society is a new phenomenon, it is not a new concept. The modern field of artificial intelligence came into existence in 1956, but it took decades of work to make significant progress toward developing an artificial intelligence system and making it a technological reality.
With all these new artificial intelligence use cases comes the daunting question of whether machines will force humans into obsolescence. The jury is still out. Some experts vehemently deny that artificial intelligence will automate so many jobs that millions of people find themselves unemployed, while other experts see it as a pressing problem.
“The structure of the workforce is changing, but I don’t think artificial intelligence is essentially replacing jobs,” said Dr. Hossein Rahnama, founder and CEO of artificial intelligence concierge company Flybits and visiting professor at the Massachusetts Institute of Technology. “It allows us to really create a knowledge-based economy and leverage that to create better automation for a better form of life. It might be a little bit theoretical, but I think if you have to worry about artificial intelligence and robots replacing our jobs, it’s probably algorithms replacing white-collar jobs such as business analysts, hedge fund managers and lawyers.”
Co-founder and CTO of Nara Logics Dr. Nathan Wilson said the shift toward artificial intelligence-based systems will likely cause the economy to add jobs that facilitate the transition.
“Artificial intelligence will create more wealth than it destroys,” Wilson said, “but it will not be equitably distributed, especially at first. The changes will be subliminally felt and not overt. For example, a tax accountant won’t one day receive a pink slip and meet the robot that is now going to sit at her desk. Rather, the next time the tax accountant applies for a job, it will be a bit harder to find one.”
Wilson said he anticipates that artificial intelligence in the workplace will fragment long-standing workflows, creating many human jobs to integrate those workflows. Other experts are not as sure about where the new jobs will come from once artificial intelligence becomes ubiquitous.
Whether rosy or rocky, the future is coming quickly, and artificial intelligence will certainly be a part of it. As this technology develops, the world will see new startups, numerous business applications and consumer uses, as well as the displacement of certain jobs with the creation of entirely new ones.
Let’s embrace the future and replace the past. At My Office Apps, we are incorporating elements of artificial intelligence into our software; not to replace people, but to free them up so they can create more value for your business. If we can eliminate the drudge work for your employees, such asentering routine data into a spreadsheet in favor of spending more time talking with customers, it is a win-win situation for everyone. Call us to see how Kechie™ could solve your business process problems and provide demonstrable value. Or visit us at www.myofficeapps.com to schedule a demo today.
Uzialko, A. (2019, April 22). How Artificial Intelligence Will Transform Business. Retrieved from https://www.businessnewsdaily.com/9402-artificial-intelligence-business-trends.html
About My Office Apps, Inc.
My Office Apps, Inc. (MOA) is a leader in business improvement software solutions to automate your organization. Building on three decades of software design and development, MOA delivers Kechie™, a transformative business tool. Kechie is a fully integrated Enterprise Resource Planning Software as a Service (SaaS) platform with a simplified user experience and the latest in cloud technology. It is quick and easy to implement without the expensive price tag. Sold in separate packages – inventory and warehouse management (CRM, Sales, Procurement, Logistics included), manufacturing, finance – or a fully configured ERP system to include all of these individual tools. Kechie is easily configured to the scalable needs of your growing business. For more information on managing your business processes more efficiently and effectively, visit www.myofficeapps.com.
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Still Holding the Hands of Your Sales Team?
Still Holding the Hands of Your Sales Team?
Let Kechie Provide You with an A.I. Sales Coach
Don’t you wish you could watch over every single salesperson on every single sales call and give them tips on how to sell more? The Kechie™ ERP software provides an equivalent capability called Upsales, using artificial intelligence-like techniques to provide real-time tips to a salesperson when they are in discussion with a prospect.
The Upsales feature provides coaching to make it easier for salespeople to sell add-on products when talking to their customers. Oftentimes, the most profitable products may not be products a customer sets out to purchase, but rather a secondary product to accompany the purchase. For example, if a computer salesperson is talking to a customer about purchasing a laptop computer, he/she might suggest they also include a spare battery and a laptop case with the order and increase the overall revenue and margin from the sale.
First, the Kechie Inventory module allows management, or product manager, to program Upsales links between products that pair naturally together. These links are the basis for the suggestions of additional items to suggest when selling. Secondly, a new icon appears in the Sales Order Entry module when a salesperson is entering the order for the first item. This icon reminds the salesperson can suggest additional products to the customer. When clicked, a popup screen appears with additional accessories or add-ons to the sales order. If the customer agrees, the salesperson can make this addition with a single click.
Smart algorithms and A.I. technology are examples of features within the Kechie ERP system to enhance efficiency and profitability for companies. Our goal is to provide the best solutions for small and medium-sized businesses using the latest techniques in order to contribute to the success of our customers. For more information, you can visit www.myofficeapps.com, or better yet, call us at (949) 486-1947 and ask us to schedule a demo so we can show how we can help solve your business issues you face, both today and tomorrow.
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Improve business efficiency with Artificial Intelligence
Are Your Employees Spending Too Much Time on the Hamster Wheel?
In previous blogs, we described how Artificial Intelligence techniques (AI) in an ERP system can help improve efficiency and accuracy in your operations. It can also free up employee resources with extra time for creative activities to add value for your business. In this blog, we will describe one feature in our Kechie™ ERP system that uses AI techniques to automatically generate a whole series of new part numbers.
In any business, a critical item used in tracking almost every transaction is the Part Number or SKU (Stock Keeping Unit). Part numbers are used in sales orders, purchase orders, manufacturing, inventory tracking, invoicing and everywhere in between. The use of part numbers creates differentiation between multiple items for ordering, picking and packing the exact item requested by the customer. Many companies have thousands (or millions) of part numbers in their system. Managing this giant mass of data can become impossible without strong processing software to assist along the way.
New part number creation is one activity that can be quite time consuming for your staff, particularly when a large number of new part numbers need to be added at the same time. For the apparel industry, this can be a daunting task. For example, a buyer wants to add a new style shirt to the inventory. The shirt is available in long-sleeved and short-sleeved, classic and slim fit, sizes include extra small, small, medium, large, extra-large, and available in the sixteen colors. That’s 320 new sku’s to be added to the system. One-by-one, an employee sits in front of a screen and adds new parts numbers – perhaps a multiple day project. Is there a better use of this resource?
Here’s where a built-in intelligence can save the day. Kechie delivers a function that can automatically create part numbers and add them to the system. An employee can now focus on descriptions and selling features for a quick-to-market process rather than being bogged down with keystrokes. The artificial intelligence features in Kechie not only help set up new products – but can help your sales staff to up-sell features and products to maximize profitability. More will be revealed on this feature in coming blogs.
My Office Apps, Inc., a business process improvement company, is committed to providing continued improvements and incorporating various advanced AI techniques in our Kechie ERP software. Our goal is to provide the best processing solutions for small and medium sized businesses in order to contribute to the success of our customers. In the coming weeks, we will post additional articles that describe some of the specific AI features present in the Kechie ERP software and also provide a road map for other features that we expect to implement in the future. Our focus is not to just provide AI for AI’s sake, but rather to implement practical AI functions that can make a real difference in your business. For more information, you can visit www.myofficeapps.com or better yet, call us at (949) 486-1947 and ask us to schedule a demo so you can view these features for yourself.
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WFH: Chapter 2 - The Benefits Outweigh the Risks
Working from Home Series
Chapter Two: The Benefits Outweigh the Risks
We know that many of you are working hard to adapt to the current coronavirus situation. Some companies, particularly those in health, medical supplies, or food distribution business, may be faced with a very rapid increase in demand. You are likely struggling through the logistics on how to handle it. A great many companies are shifting to a Work-From-Home (WFH) mode for their employees. They are learning and improvising new techniques to stay as productive as possible, even when not all together in the same office.
This current crisis will eventually pass. Solutions in the forms of treatment protocols and vaccines will be developed to defeat the virus. But when it is all over, companies will not just revert back to doing business the same way they did before. Businesses will want to incorporate many of the things they learned during the crisis to be more productive, efficient, and flexible than before. The benefits that are expected to come out of this pandemic will change the way we live and play for the better.
Benefits to Society
When millions of commuters no longer commute, traffic jams will smooth out. The climate may improve with fewer emissions of greenhouse gasses. Additionally, for those areas which are experiencing high housing prices, work from home will allow workers to live farther away from the main office. Suburban areas tend to have lower housing costs. Our future will see a reverse shift of populations in crowded cities.
Benefits to Employers
Those people who succeed in business do so because they always think several steps ahead. Strong companies will trudge through the pandemic and florish. Flexibility sets your company up for success Employers who were previously reluctant to allow work from home may also observe the productivity benefits and no longer object to it. With less space required for corporate offices, smart employers will save money by downsizing square footage while receiving equal or greater productivity.
Benefits for Employees
Simply by eliminating the commute to and from the office each day, workers will have more time available. Many will find that they achieve even higher productivity working from home because there are fewer interruptions or time-wasting meetings. The usage of video teleconferencing software such as Cisco Webex, Zoom, or GoToMeeting is exploding and many users are downloading this software and learning to use it for the first time. The use of other tools such as team collaboration software like Microsoft Teams and Slack is increasing as well.
The key to differentiating between a workplace fad and an economic strategy lies in the hands of the businesses. If corporate leaders throughout the world believe remote work is beneficial to the sustainability of their brand, then they’ll invest in the development of it as a resource. In other words, if there is value in telecommuting for organizations, there is value for the world.
The Kechie™ ERP solution was designed to facilitate remote work. Based in the cloud, it can be accessed from anywhere that has an internet connection via desktop, mobile devices including smartphones and tablet computers. It is simple and intuitive to use and allows large teams to share important business data through the data bases in the system. Relevant data from each of the modules is automatically shared so that people working in other departments can use it, if needed. No more walking over to the next aisle to ask a fellow employee what is happening. Everything is recorded in the system.
As a business process improvement company, My Office Apps Inc. remains committed to delivering beneficial software tools to help businesses today and tomorrow. For more information, you can visit www.myofficeapps.com or better yet, call us at (949) 486-1947 and ask us to schedule a demo. Let us show you how we can solve your business challenges during this pandemic and moving forward.
WFH: Chapter One - The Dog will Bark during your Meeting
Working from Home Series
Chapter One: Your Dog will Bark during your Meeting
If you’re a person who spent your pre-pandemic work life in a cubicle or office, right now is a good time to throw yourself into looking on the bright side. Working from home is what you dreamed about every morning and evening when you were stuck in traffic or jammed onto a crowded bus or subway car. Yes, it’s all terrifying and apocalyptic right now — but you can sit in your pajamas all day. You can hang out with your dog. You can make a snack anytime you want, and you can eat it with the TV on in the background.
As companies adjust to the “new normal” of remote work amid the COVID-19 pandemic, maintaining a strong culture and engaging employees is critical. Embracing remote-work opportunities can deliver positive changes to business metrics, including reduced expenses and increased productivity, but requires a willing and motivated shift in perspective from management and staff.
The effectiveness of working from home has been a debated topic for decades. Only about a quarter of the US workforce works from home on a consistent basis. Concerns around productivity, collaboration, connectivity and distractions have all been cited as reasons working from home is not effective.
However, it has taken a pandemic to force a distributed workforce to come together and use online collaboration and technology tools to their full potential. An estimated 900 million people around the world are now working remotely to slow down the spread of the virus. Tools like Zoom, Slack, Google Hangouts, and Microsoft Teams are being rediscovered for their value in supporting video, messaging, conferencing, document sharing, virtual white boarding and many other features.
As we begin to better understand the real potential of working from home, we could now be looking at the future of work. In this new business model, offices may become a fixture of the past and relegated to an occasional pit stop to greet colleagues and process administrative tasks.
The result? Work is actually getting done remotely! And benefits around flexibility and reduced commute times may actually increase productivity and effectiveness. In fact, those of us who work from home often find ourselves overworking. We tether ourselves to our desks and stress ourselves out more at home that we do at work. That’s why it’s important to make sure we take care of ourselves and don’t burn out while working remotely.
During this time, stay connected with friends and build in healthy distractions. Keep perspective and give yourself permission to prioritize information flow. Focus on others and keep moving. Today’s challenges will shift and we will return to a new normal with plenty of new learning and expanded adaptability.
At Kechie™, we can see a shift in how the coronavirus pandemic will permanently change the way business will be done in the future. Our belief is that working from home will become a permanent aspect for many of us. Employers, who were previously reluctant to allow work from home, may also observe the productivity benefits. We will have more to share on this topic in the coming weeks. Until then, please take care of yourselves, follow all the guidelines, and do your best to remain healthy.
Win Big with ERP: AI Solutions to Influence Your Bottom Line
Win Big with ERP: Artificial Intelligence Solutions to influence Your Bottom Line
One of the hottest topics in IT today is Artificial Intelligence (AI). By continuing to automate certain functions using sophisticated AI algorithms, one can free up employee resources for more creative activities that will add further value for your business. Although some believe that AI may replace more mundane jobs, our belief is exactly the opposite. AI will help create an increased number of less-repetitive jobs in your organization making it more innovative, more responsive to your customer’s needs, and more successful. AI will also bring operational benefits with an ability to reduce errors and improve processing times for various transactions that will decrease costs and improve customer satisfaction.
AI incorporates the ability to find trends in a large collection of data and provide insights that may not be obvious to a person looking at gigabytes of data. Many AI programs incorporate the ability to learn from previous activities and allow one to develop more accurate forecasts and predictions.
AI technology can make a positive impact in multiple areas of your business. These can include:
- Inventory Management – By helping to provide more accurate forecasts — optimizing supply chains — figuring out the most efficient way to store the inventory — and tracking product lifecycles, various AI techniques can improve costs, decrease waste, and improve cycle times.
- Production Management – Figuring out the most optimal way to process your backlog in your manufacturing plant can become a horribly complex problem. Utilization of AI techniques can figure out the best ways to select what order to process the jobs in your backlog, which machines to use, maintenance scheduling, and overall logistics as the work-in-process moves through the manufacturing cycle. These optimizations can help decrease the amount of capital equipment needed, improve cycle times, and lower costs.
- Sales – One of the most profitable ways of improving your sales is to implement sophisticated upsells and cross-selling approaches. A sophisticated AI algorithm can help by analyzing, in real-time, what additional products to recommend based on previous customer history and other information.
- Financial Management – Besides automating various financial functions, an AI program can help a financial manager make various key decisions, such as how much cash to keep on hand, whether a capital investment will pay off, and double-check financial statements for accuracy.
- Marketing – A key marketing function is to develop the best and most effective message for your marketing campaign based upon a variety of factors. These include customer demographics, competitive challenges, historical performance, product attributes and many others. Analyzing these factors can involve looking at a great deal of data. By utilizing advanced analytics, a good AI program can help a marketing manager sift through all these factors and create the most effective marketing campaign.
As part of our mission to be a business process improvement company, My Office Apps, Inc. is committed to providing continued improvements and incorporate various advanced AI techniques in our Kechie™ ERP software. Our goal is to provide the best solutions for small and medium sized businesses with the latest techniques to contribute to the success of our customers. In the coming weeks, we will post additional articles that describe some of the specific AI features we have already incorporated into our Kechie software and also provide a roadmap for other features we expect to implement in the near future. Our focus is not to provide AI for AI’s sake, but rather to implement practical AI functions that can make a real difference to your bottom line. For more information, visit www.myofficeapps.com, or better yet, call us at (949) 486-1947 and we will schedule a demo so you can view these features for yourself.
5 Ways AI is Changing our World for the Better
5 Ways AI is Changing our World for the Better
Man has long feared the rise of the machine – his own creation becoming smarter and more intelligent than he. But while artificial intelligence and machine learning are rapidly changing our world and powering the Fourth Industrial Revolution, humanity does not need to be afraid.
Creating New Jobs
“Artificial intelligence will change the workforce,” affirms Carolyn Frantz, Microsoft’s Corporate Secretary. The bleak view of AI as a job killer is but one side of the coin: while 75 million jobs may disappear, as many as 133 million more engaging, less repetitive new roles are expected to be created. AI “is an opportunity for workers to focus on the parts of their jobs that may also be the most satisfying to them,” says Frantz.
Bridging Language Divides
Whether it’s teaching new languages in a personalized way or translating speech and text in real-time, AI-powered language tools from Duo lingo to Skype are bridging social and cultural divides in our workplaces, classrooms and everyday lives. Digital translation services are not “perfect,” admits Microsoft education leader Mark Sparvell, but “they offer a means of understanding” that might not otherwise be possible.
Transforming Government
Less paperwork, quicker responses, a more efficient bureaucracy – AI has the power to drastically change public administration, but are governments ready? This tech comes with both risks and opportunities that need to be understood and evaluated. Academic Kevin Desouza believes gamification and role-playing could be the key to public servants analyzing complex cases, coming up with better solutions, and truly understanding the future of autonomous systems.
Delivering Health Care
AI has the potential to make health care “much more accessible and more affordable,” insists Paul Bates, director of NHS services at Babylon Health. Babylon, an app that offers symptom checking and fast access to physicians if needed, is providing advice to more than one million residents in central London through an AI-powered chatbot. Patients can get an accurate, safe, and convenient answer in seconds – and save health care providers’ money too.
Creating Art
Computational creativity is drastically changing the nature of art. Software, more than a tool, is becoming a creative collaborator, merging computer scientist with artist. As Austrian artist Sonja Bäumel assures, “The exhibition space becomes a lab; art becomes an expression of science, and the artist is the researcher.”
Rey, M., (2019, June 25). 5 Ways AI is Changing Our World for the Better. Retrieved from https://www.salzburgglobal.org/news/latest-news/article/5-ways-ai-is-changing-our-world-for-the-better.html
About My Office Apps, Inc.
My Office Apps, Inc. (MOA) is a leader in business improvement software solutions to automate your organization. Building on three decades of software design and development, MOA delivers Kechie™, a transformative business tool. Kechie is a fully integrated Enterprise Resource Planning Software as a Service (SaaS) platform with a simplified user experience and the latest in cloud technology. It is quick and easy to implement without the expensive price tag. Sold in separate packages – inventory and warehouse management (CRM, Sales, Procurement, Logistics included), manufacturing, finance – or a fully configured ERP system to include all of these individual tools. Kechie is easily configured to the scalable needs of your growing business. For more information on managing your business processes more efficiently and effectively, visit www.kechie.com or www.myofficeapps.com.
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Access Control Systems: The Power to Secure what’s Yours
Access Control Systems: The Power to Secure what’s Yours
A critical element in securing your business is controlling access to your business space. While cyber security tends to be top of mind for many businesses, controlling who enters – or has access to your business – is the first line of defense against intruders, thieves and even potential employee misconduct. Choosing access control systems wisely protects your staff, your stuff and your data.
What is an Access Control System?
Access control is a way of limiting access to a system, either physically or virtually, and users must present credentials before they can be granted access. In brief, access control is used to identify an individual who does a specific job, authenticate them, and then proceed to give that individual only the key to the door, the workstation, or the software tools they need access to and nothing more. Access control systems come in three variations:
- Discretionary Access Control (DAC): This is the least stringent form as it provides one level of access for all with approved credentials.
- Mandatory Access Control (MAC): This is the strictest and most work-intensive form of access control as it requires the system administrator to assign an access level to each individual added to the system.
- Role Based Access Control (RBAC): This is the most common form. With this approach, roles or job titles are added to the system with a level of access assigned to each, based on the access needs someone in that role will have. When a new person is added to the system, they are added with a given role or job title and the level of access is automatically assigned. This is also called rules-based access.
Cloud-Based Access Control
Access control in the cloud started with small business end users because it made sense. Offering them a way to get many of the same features larger enterprises enjoyed while not requiring the same infrastructure was a natural fit. The main benefit of cloud-based access control is that these systems are much easier to manage and maintain than traditional access control systems. You never have to worry about losing important information if/when your system crashes. Also, upgrades or new features can be applied automatically and seamlessly, with no need for site visits by technicians. With a cloud-based physical access control system, your cloud environment is a trusted and compliant environment that always provides you with full control, governance, and ownership of your data.
As you can see, when it comes to choosing the type of access control system that is most suitable for your organization, there are a number of factors involved. Some of those factors include the nature of your business, security procedures within the organization, and the number of users on the system. Kechie™ ERP offers complete and customizable access control tools that are as unique as your business. For more information on managing your business processes with role based access control, visit www.myofficeapps.com.
About My Office Apps, Inc.
My Office Apps, Inc. (MOA) is a leader in business improvement software solutions to automate your organization. Building on three decades of software design and development, MOA delivers Kechie™, a transformative business tool. Kechie is a fully integrated Enterprise Resource Planning Software as a Service (SaaS) platform with a simplified user experience and the latest in cloud technology. It is quick and easy to implement without the expensive price tag. Sold in separate packages – inventory and warehouse management, manufacturing, finance – or a fully configured ERP system to include all of these individual tools. Kechie is easily configured to the scalable needs of your growing business. For more information on managing your business processes more efficiently and effectively, visit www.myofficeapps.com.
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What is Vendor Managed Inventory? How to Make VMI Work
What is Vendor Managed Inventory? How to Make VMI Work
Looking to streamline your supply chain and reduce inventory costs? You might want to look into Vendor-Managed Inventory (VMI). A VMI software might be the solution – as long as you know the best practices to make it work. So, what is VMI, and what is the impact on your business?
Vendor Managed Inventory is a business arrangement where the vendor of a product takes responsibility for making sure the buyer has the agreed inventory. The supplier or vendor ensures the stock is replenished automatically without the buyer’s initiation. If done right, VMI is a win-win situation for both the vendor and the customer.
What benefits can VMI bring to your business?
- VMI helps cut operating costs – With the supplier handling the quantity and frequency of orders, you can reduce costs associated with personnel and space.
- Lean inventory levels – VMI allows your vendors to supply in-demand goods at the right time. This also removes the need for safety stock.
- Improved Efficiency – The speed of stock replenishment is improved, and the risk of running out of stock is reduced. This improved service trickles down to the end-users.
What are the benefits of VMI for the Manufacturer/Supplier?
- Forecasting is easier courtesy of access to the buyer’s Point of Sale data.
- An optimized VMI program ensures you supply what is needed, and at the right time. Visibility to inventory levels helps the manufacturer ascertain the need for a product before it’s ordered.
- Produces a predictable and steady flow of income while mitigating the risk of losing the customer to a competitor.
- VMI reduces ordering errors and helps the supplier schedule operations productively
- A VMI program facilitates a stronger Customer-Supplier relationship. Both parties must work closely together to ensure seamless inventory management activities.
Cons of VMI
Regardless of the benefits highlighted above, enforcing a VMI program has a few drawbacks that business owners should keep in mind. One of the main disadvantages of VMI is its impact on sourcing. It’s difficult for supply chain managers to consider re-sourcing when the current VMI program is well-run. Some managers might be compelled to compromise supplier-related issues such as higher prices due to over-reliance on a vendor.
Granting non-employees full access to your inventory data is a significant risk. Leaving your stocking needs to the mercy of a 3rd party makes your business vulnerable to errors by the supplier, and even sabotage from competitors.
3 Steps to a Successful VMI Program
- Clarify expectations – and make them realistic: How will the system impact the supplier and the company? Both parties should be engaged in honest discussions to ensure everyone understands the risks and returns of the arrangement.
- Share information seamlessly: The success of a VMI program rests on the quality of information shared between the two parties. The supplier/manufacturer must have full visibility into the inventory levels to ensure a steady flow of goods.
- Clear and open communication: Constant and open communication is vital to the sustainability of the VMI business model. This includes discussing goals and progress towards achieving them. Each side must prevent a breakdown in communication, especially when miscues arise.
To make the best of vendor managed inventory, it's important to utilize a complete inventory management solution to carry out all of the necessary steps on your behalf. Without insights into your inventory, it's difficult to have automatic replenishment of vendor-managed inventory and timely invoicing. That's why it's important to utilize an inventory management solution like Kechie software, which allows you to set up, and streamline your VMI, to maintain automated operations between the vendor and all of the tracked inventory.
