How to succeed at supply-chain collaboration

Computerworld - Years of lackluster attempts to improve supply chain efficiency have prompted a back-to-basics approach to supply chain planning. Many manufacturers and retailers are realizing the value of elevating tried-and-true collaborative supply chain processes, most notably vendor managed inventory (VMI).
Enabled by the pervasive use of electronic data interchange (EDI), VMI emerged in the late 1990s as a way for suppliers to manage the replenishment of inventory for their retailer partners. Recently, there has been a resurgence of interest in VMI programs from suppliers, especially those in the consumer products market, as a practical approach to lowering inventory within the supply chain and as a key first step to enhancing partner collaboration.
As with many collaboration initiatives, VMI programs are often undermined before they are started. This is especially true when technology is applied without the proper organizational infrastructure. The following tips will help align the right people, processes and technology for successfully implementing VMI.
View VMI as a collaborative partnership vs. a transactional relationship
The ill-fated and all-too-typical scenario for starting a VMI program is a retailer's request to its suppliers, resulting in a negative response from suppliers' management teams. Suppliers often see the program as a retailer's attempt to push inventory cost and risk back down the supply chain. This is an unfortunate reaction, since VMI presents enormous opportunities for suppliers as well as their various stakeholders.
The first key to a successful VMI program is to establish and articulate a clear, agreed-upon motive for VMI, beyond "the retailer said so." To do this, it's necessary to establish a relationship between the supplier and retailer management teams to develop mutually beneficial goals, monitor progress and resolve potential conflicts.
An initial kickoff meeting with the retail customer is crucial to establish the goals and scope of a program. During this meeting, it's necessary to agree on short- and long-term goals of the program and data points and key assumptions that will be used to manage the process. It's also important to come to a consensus on how any exceptions to the standard VMI process will be managed, e.g., how promotional plans will be communicated.
Ultimately, this senior-level interaction and communication will lend significant credibility and visibility to the VMI program.
Integrate VMI into overall business processes, especially inventory management
This next step must consider the available people, processes and technology infrastructure required to execute VMI. Many companies already have these resources at their disposal, so a careful assessment of the organization's existing capabilities is important.
People. In many cases, customer