An effective lean supply inventory management model using VMI hub

This paper describes an effective lean supply inventory management model using VMI hub for electronics industry. For a complex supply chain system, it is desired a lean supply inventory management approach with simplicity and efficiency. The key elements of such a system are identified as suppliers, VMI hubs, and factories. This paper firstly compares the two supply inventory models and explains the benefits of the model with VMI hub. Then the two key processes of the lean supply inventory model with VMI hub are further discussed, i.e. the kit-to-line process between a VMI hub and factories and the JIT suppliers pull process between suppliers and the VMI hub. Finally the pilot run results are shown to suggest significant performance improvements in terms inventory savings and cycle time reductions.