Yamazato's fasteners diary / What is VMI?

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Yamazato's fasteners diary / What is VMI?

    Greeting to every readers! I am Yamazato from Hanshin Neji, hope everyone are doing well! Sorry for missing from writing blog for a long time, please forgive me (Could be no one wait for me to read my blog!? lol). In this column I would like to write about VMI system which is trendy at the moment. This blog could be long but I will do my best to express it to make all of reader get useful information in manufacturing process.


What is VMI?

 


Firstly, let’s define the word “VMI” It stands for Vendor Managed Inventory. This system is offered by vendors to manage inventory at their customers’ factories or warehouses. 

    In a typical manufacturing process, tools, materials, fasteners, and other items are constantly used. Sometimes, they run out of stock, requiring the responsible person to check regularly and maintain an optimal stock level for smooth production. When specific inventory items are out of stock, the process involves requesting prices from suppliers, placing orders, and storing the items. This can be time-consuming. 

    However, with a VMI system in use, customers can monitor stock levels in real-time. If stock runs low and reaches the order point, the vendor automatically replenishes it. Customers no longer need to worry about running out of stock, which significantly reduces their working time and allows them to focus on their manufacturing goals.

 

VMI System: The Modern Vending Machine for Industrial Products


    VMI (Vendor Managed Inventory) systems are gaining popularity in North America and Europe. During a visit to a customer factory in the United States, I noticed an area with several vending machines. These machines contained a variety of industrial products, including helmets, working gloves, cutting tools, and grindstones. When employees needed an item, they simply tapped their ID card at the machine reader, and the requested product was dispensed—similar to how coffee or juice vending machines work. This efficient business model reduces the working load of managing inventory and payment.

 
    Moreover, this concept isn’t entirely new. It reminds me of the ancient medicine sellers in Toyama, Japan, who used a similar system. Even screws, which were traditionally stored in plastic boxes on shelves, can now benefit from this vending machine-like method.

 

Is VMI really popular, why is it?


    My opinion is this system is very useful for both customers and venders, that is why this system became popular. I will share the expression to support this in following information.


A Visit to a Hamburger Shop in Los Angeles, I found myself at a hamburger shop in an urban area of Los Angeles where a hamburger set costs about $13, which is roughly 2,000 Yen. For a family of five, that would be cost around 10,000 yen! The thought unexpectedly made me laugh.


    Labor costs in Europe and America are notably high. Recently, my wife’s daughter’s friend, who is studying in the U.S., mentioned she earns $20 per hour (about 3,000 Yen) working part-time at a store. Full-time employees would naturally earn more.
    This got me thinking about the hidden costs of labor. For instance, the time spent walking to check inventory, getting quotes from vendors, comparing prices, and placing orders can add up to hundreds of yen just moving around the store. As I sip my coffee and working over an email, I wonder: is all this necessary? Managers must consider this too.
    Perhaps it’s better to let the vendor handle these tasks, even if it means paying a little extra. Process would be smoother, freeing us to focus on more important matters.

 

    In my opinion, people today often switch jobs rather than staying with one company for a long time. If we examine current job trends (which can vary based on different research companies), trading companies, IT firms, and finance companies rank high in Japan. Even Toyota, a renowned manufacturing company, is now in 10th place (although some articles claim that Toyota number one in job hunting trends). I don’t have specific information about job trends in Europe or America, but the situation could be similar.

    However, this frequent job hopping can lead to a shortage of skilled workers. High turnover rates in North America and other countries might cause the issue. When people change jobs frequently, processes need constant renewal, making it challenging for employees to fully learn their roles.

    To summary this, consider using a contractor or vendor to manage inventory. This approach is becoming popular as it helps reduce out-of-stock situations and eliminates dead stock. By sharing inventory responsibilities with vendors, companies can focus on their core tasks more effectively.

What’s Our Deal?


    Although we are not yet providing such full service of vending machine service or fancy system, we are initiating similar solutions to customers in Japan and Thailand. We provide a simple but functional system to our customer for free of charge, this system made them to easily manage inventory and place order with their smartphones or PCs. We have been applied this system to our current customer as trial period and turned out the result is very satisfied from our customer.

Our available functions are very simple but fuctional: 1. Inventory management 2. Easy ordering

 
    We will create unique QR code and put on the box or shelf where each fastener is stored. When customer would like to take the fastener, they have to scan the QR code and input the quantity they would like to take by themselves. After that, current stock level will be updated and everyone who are using the system can see the information.

    To explain this is easy way, you can place the order with just scanning the QR code. We understand that each customer has their own rules for ordering process, so instead of placing order in the with ordinary way. We will automatically send a quotation according to customer scanned list then customer can follow their ordering process as they were. This will reduce customer working time significantly in request of quotation process.

 

Introduction to Our VMI System


    Our Vendor Managed Inventory (VMI) system, which might not as comprehensive as vending machine services or other advanced machinery, we offer a similar solution to our customers in Japan and Thailand. We provide a straightforward yet functional system with free of charge, enabling customers to manage their inventory and place orders effortlessly using their smartphones or PCs. This system has been implemented with our current customers on a trial period, and the feedback has been positive.

Our system’s features are simple:

Inventory Management: We facilitate inventory tracking by creating unique QR codes for each fastener’s storage location. Customers can scan these codes and enter the quantity they wish to use, updating the stock level in real-time for all system users.

Easy Ordering: The ordering process is reduced to a simple QR code scan. We acknowledge that each customer has their own set of ordering process; therefore, we automatically send a quotation based on the customer’s scanned list, allowing them to proceed with their current ordering process. This significantly reduce the quotation request process for our customers.

    As we have developed this VMI system in-house using AppSheet, we are limited in our ability to add complex functions. However, we believe that the current functionalities will significantly reduce both working and delivery times for our customers, as well as enhance inventory storage efficiency.

 
For example, the normal working method of writing down missing products and then contacting vendors from a desk is no longer necessary. With our system, these tasks can be accomplished directly at the point of use. We expect that this seamless workflow will become increasingly common, and we look forward to see further improvements in working processes as a result.

    Our company is committed to supporting manufacturing units by allowing them to concentrate on their core manufacturing tasks. We aim to meet the requirement regarding screw supply in every aspect, ensuring that the correct screws are delivered to meet all user expectations. While we have not yet fully realized this goal, we are continuously improving our system, both in terms of IT and overall contribution to the manufacturing sector.


If you are interested in learning more about our VMI system, please do not hesitate to contact us. I am appreciate your time in reading this detailed explanation.