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Supplier-Managed Inventory for Central Kitchen Operation

Every successful food business operates with an effective inventory management system, which is the core of Supply Chain Excellence. This is a crucial part of running a profitable food enterprise. Without an effective inventory management system, this can lead in over-ordering thus resulting in food wastage, or under-ordering resulting in unfulfilled customer requirements. An important area is adopting Vendor Managed Inventory (VMI) or Supplier Managed Inventory (SMI). This is an effective business strategy that can assist business owners to leverage on the business operation without increasing headcount and industrial technology cost. This can only be possible with a strategic collaboration between preferred suppliers and the food business owners.

Supplier-Managed Inventory (SMI)

SMI allows both parties the ownership to access to the same system/portal, to view and update the system promptly whenever there is movement of stocks in real time. it can also assist to monitor the stocks promptly so that the re-order point can be set upon operation’s needs.

From the supplier’s perspective, it can allow them to track inventory using allocated minimum, maximum and stock-level re-order point. An indicator will then notify customer’s end, should the allocated stocks level be low, it will notify customers to start to make replenishing from their respective suppliers both local, international and global. Suppliers are then able to track inventory through a variety of reports and live data. This will enable better efficiency in delivery times and forecasted demands more accurately for customer requirement.


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David Wong, DPSM
David Wong has substantive work experience in the area of supply chain management, and specifically in the Food Industry. He is a member of the Singapore Institute of Purchasing and Materials Management (SIPMM). David completed the course on Diploma in Procurement and Supply Management (DPSM) on September 2018 at SIPMM Institute.
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