Dannon Takes a Fresh Approach to VMI
Vendor Managed Inventory (VMI) progams have been in place at many consumer goods companies for years, but leaders are just now asking: “How can I gain more value?” The Dannon Company Inc. seems to have the answer as it pursues VMI as an integral part of its “Customers First” program, which as its name implies, is an effort to understand its customers and their goals first.
In a CGT web seminar on March 15, 2011, Paula Sawyer, VMI program manager for Dannon, explained how VMI is now a strategic initiative to work more closely with key retail partners and grow sales. Historically, Dannon’s VMI programs were supply chain-focused and transactional. “With our new vision, we are viewing VMI as an enabler to get closer to the store shelf,” said Sawyer. “We had to think differently -- look at the benefits beyond standard supply chain metrics.” This switch in mindset resulted in shared benefits for Dannon and its customers, like increased sales, decreased costs and partnerships that ultimately result in greater shopper satisfaction.
Mike Griswold, vice president of Research - Retail, Gartner's Supply Chain Research, explained the role of VMI as an enabler of joint value creation. “VMI enables two trading partners to electronically connect in order to facilitate the planning and execution or core supply chain processes,” said Griswold. “We’re seeing VMI interest continuing to gain traction from both retailers “pulling” and supplier “pushing”. More mature retailers are expecting more from their VMI relationships and are not afraid to discontinue if they perceive they can do more. This is important for consumer goods companies who should monitor and measure the VMI maturity of their retail partners.”
Next, Scott Kleinert, director of Sales, Consumer Goods, Datalliance, provided an overview of VMI activity in the industry. Existing suppliers are rediscovering the value of VMI, new proactive suppliers are adopting a strategy and retailers are resurfacing and opening up to VMI again. “What we see that is important to both suppliers and retailers are growth and cost control,” he said. Kleinert then previewed emerging requirements in consumer goods, like the ability to join or build orders for multiple locations, and how Datalliance’s Software-as-a-Service VMI offering can help to address them.
Click here to listen this web seminar, “A New Look at VMI: How Dannon is Using VMI to Strengthen Retailer Relationships and Grow Sales” and learn more about Dannon’s VMI journey, including the SaaS platform that supports its new vision and the quantifiable results realized.