This inventory management strategy breaks the traditional fragmented inventory management model. It embodies the integrated management idea of supply chain and adapts to the requirements of market changes. It is a new and representative inventory management idea. At present, VMI plays a very important role in the distribution chain, so more and more people pay attention to it. The prerequisite for VMI operation mode to promote VMI operation Enterprises should analyze and compare their own environment and conditions before implementing VMI. The main factors to be considered are as follows: the position of the enterprise in the supply chain, that is, whether it is a "core enterprise" or whether it is a vital enterprise in the supply chain. It requires that the implementing enterprise must have talents with high management level and special user management functional departments to handle ordering business between suppliers and users, inventory control of suppliers to users and other businesses; We must have strong strength to promote VMI, so that enterprises in the supply chain can implement target framework agreements such as replenishment, distribution and information sharing according to its requirements. The position of enterprises in the supply chain. VMI is generally suitable for retail and manufacturing, and the most typical examples are Wal-Mart and Dell Group. They have a * * * characteristic, that is, their positions in the supply chain are very close to the final consumers, that is, they are at the end of the supply chain. One of the main reasons is that VMI can eliminate the "bullwhip effect". A reputable partner. During the implementation of VMI, retailers (manufacturers in manufacturing industry) are required to provide sales data, while suppliers are required to deliver goods to the places designated by customers on time and accurately, which is particularly demanding for manufacturers. The supply chain structure of VMI system is different because of the different positions of core enterprises in the supply chain, and it is generally divided into two categories according to the different positions of core enterprises. A. The downstream of the supply chain is the core enterprises; B. the upstream of the supply chain is the core enterprise. Due to the different positions of core enterprises in VMI system, the cooperation modes between core enterprises and their partners are different. For example, core enterprises generally choose self-operated logistics when they are upstream, but they can choose self-operated logistics or outsourcing logistics when they are downstream. This will lead to the change of VMI operation structure. Next, the corresponding operation modes will be put forward for A and B respectively. The operation mode of VMI is as mentioned above. In the VMI system, the core enterprise can be in the upstream or downstream of the supply chain, and when it is downstream, it can be the middle link or the end of the supply chain. Obviously, the operation mode of VMI is different in different situations, and there are three main situations: supplier-manufacturer (core), supplier-retailer (core), and core enterprise (generally manufacturer)-distributor (or retailer). The first two modes of operation are mainly discussed here, and the latter mode only makes some supplements to the first two modes. Supplier-manufacturer VMI operation mode In this operation mode, besides being a core enterprise, it generally has the following characteristics. The production scale is relatively large, and the production of manufacturers is generally stable, that is, the daily demand for spare parts or raw materials does not change much; Suppliers are required to supply small quantities of spare parts at a time, generally meeting 1 day, and some even for several hours; The frequency of supply is high, sometimes even two or three times a day; In order to maintain continuous production, it is generally not allowed to be out of stock, that is, the service level requires more than 99%. Because the manufacturer in this model must have dozens or even hundreds of suppliers to supply spare parts or raw materials. It is obviously uneconomical for every supplier to set up a warehouse near the manufacturer. Therefore, a VMI HUB can be established near the manufacturer. Joining VMI HUB has the following effects: buffering. Because a customer has to correspond to N suppliers, if the customer has a high demand for supply frequency, then there may be a situation where multiple suppliers deliver the goods at the same time. Because there is no arrangement in advance, there will be a chaotic unloading scene, which will seriously affect the production order and bring inconvenience to the normal work of enterprises. With VMI HUB, the above phenomenon can be avoided by professional escort, which plays a buffering role. Increased in-depth services. Without VMI HUB, suppliers are independent of each other, and the delivered goods are separated from each other. With VMI HUB, it will provide picking service before delivery, and VMI HUB will allocate spare parts according to the proportion of finished products according to the requirements of manufacturers, and then send them to manufacturers, thus improving the production efficiency of manufacturers. When VMI is implemented normally, it not only requires the exchange of inventory information between supplier A and VMI HUB, but also includes information such as production plan, demand plan, purchase plan, historical consumption, replenishment plan, transportation plan and inventory situation. The information exchange between manufacturer A and VMI HUB is complete, real-time and automatic. When there is a sudden change in demand, such as the sudden increase in sales of manufacturers, the inventory in VMI HUB can not meet the needs of manufacturers in time, then the implementation structure of VMI has changed accordingly. VMI HUB directly sends the replenishment plan to the supplier's information system. At this time, the supplier directly replenishes the goods to the manufacturer, thus saving time and cost. We call the supplier's behavior of replenishing goods directly to the manufacturer without going through VMI HUB as Cross-Docking. VMI Operation Mode of Supplier-Retailer When the retailer transmits the sales and other related information to the supplier through EDI (usually the data of a replenishment cycle, such as 3 days, or even 1 day), the supplier forecasts the demand according to the received information, and then inputs the predicted information into the Material Requirements Planning System (MRP), and according to the existing inventory in the enterprise and the inventory in the retailer's warehouse, produces replenishment orders, arranges production plans and carries out production. The finished products are stored, sorted, packaged and transported to retailers. The difference between VMI operation mode of supplier-retailer and VMI operation mode of supplier-manufacturer is as follows: When goods are "received", accounts payable are generated. Usually, large retailers (e.g., Wal-Market) require that the supplier pay only after the goods of the supplier are actually sold, otherwise "accounts payable" will not be generated. This model generally does not need to build VMI HUB as a central link. Because for retailers, the products supplied by two suppliers are independent of each other, and they are not needed at the same time in the same period of time, unlike manufacturers who need parts or raw materials that must be obtained at the same time to generate a product. The participation mode of third-party logistics enterprises sometimes needs the participation of third-party logistics service providers in the actual implementation process. The reasons are as follows: in the supplier-manufacturer model, its core competitiveness is mainly reflected in its manufacturing, not in logistics and distribution, regardless of the manufacturer or supplier. Obviously, it is not economical for suppliers or manufacturers to manage VMI HUB. Under the supplier-retailer model, due to the wide range of retailers' retail products and the far geographical distance between suppliers and retailers, the lead time for directly replenishing goods from suppliers to retailers is long, which is not conducive to accurate demand forecasting and coping with emergencies. The compromise solution to this problem is that the supplier rents or builds a warehouse near the retailer, and this warehouse is responsible for supplying the retailer directly. Based on the above reasons, it is most appropriate for a highly specialized enterprise to manage this VMI HUB or warehouse, and the most ideal object at this time is the "third-party logistics enterprise". Moreover, supply chain management emphasizes that all enterprises in the supply chain should give full play to their core competitiveness, which is just suitable for the third-party logistics enterprises to meet the requirements of this inventory operation mode and give full play to their characteristics and advantages. Core Enterprise-Distributor Mode This mode takes the core enterprise as the supplier role in VMI, and its operation mode is basically the same as the first two modes. The core enterprise collects the sales information of each distributor and forecasts it, and then manages and distributes the inventory of the distributors in a unified way according to the forecast results. Because there is only one supplier in this mode, there is no problem of establishing a warehouse near the distributor. The core enterprise can arrange the distribution problem to each distributor in a unified way according to the actual situation with each distributor, and can ensure that each batch is delivered in an economic batch way, and the route of each distribution can be adjusted to the best distribution route.