Introduction

Vendor Managed Inventory (VMI) is a means of optimising Supply Chain performance in which the manufacturer is responsible for maintaining the customers inventory levels.

CTL offers VMI as follows:

Inventory

It is intended that the maximum inventory limit is nominally 30 days usage for the customer of any given sensor.

• Customer will store the CTL managed inventory in a secure location – bonded store.
• One carton will represent a lot and will contain an agree quantity of sensors -pending agreed carton dimensions, size of shelving etc.
• Customer will only take sensors from VMI in multiples of the lot quantity i.e. by the complete carton.
• Sensor types will not be mixed in each carton.
• CTL will ship replenishment sensors within 7 calendar days – pellistor sensors will be 14 days.
• A maximum re-supply frequency will be double the nominal agreed demand with the exception of pellistor sensor.
• Adding of additional sensors or changing of lot sizes will take place during the quarterly review.
• If stock downsizing is required this will be agreed between CTL and the customer.
• Shipments will be consolidated weekly, where possible, and where this would not compromise the inventory level.

Lot identification

• Each carton will be uniquely identified with a barcode and human readable data. For tracking this will be a number comprising the CTL pick note number, line number and box number within that shipment.
• Each carton will be labelled with the Customer Part Number, the Customer Purchase Order number and the quantity of sensors in the carton. This will be by bar code and human readable data.

Operation

• An extranet system will be provided by CTL via secure website for tracking inventory levels and movements.
• At the point of shipment, CTL despatch dept. will scan the lot barcode to identify that the lot is in transit.
• On delivery at Customer’s site, Customer will scan the lot number barcode. This will identify that the lot has been delivered and is in CTL managed inventory.
• When Customer issues a lot from CTL managed inventory, Customer will scan the lot number barcode. This will remove the lot from CTL managed inventory.
• Removal and scanning of a lot from CTL managed inventory by Customer will trigger an e-mail to CTL sales authorising an equal replenishment order from CTL to Customer.
• If the stock level falls to the amber warning level, automatic e-mail will notify CTL and Customer nominated staff.
• If the stock level falls to zero, automatic e-mail will notify CTL and Customer nominated staff.
• A status screen will be available on the extranet to give visibility of stock status.
• Reporting will show transaction history.
• The system will not allow the transaction of lots out of CTL managed inventory in the wrong date order (i.e. FIFO applied)
• Customer shall complete a monthly physical stock check on the CTL managed inventory against the system stock report.

Invoicing

• CTL will invoice each shipment at the time of despatch.
• Customer will issue a blanket purchase order for each part number to cover the financial year.
• All invoices will be paid on terms 30 days.

Sensor Warranty

• Sensors will carry the warranty from shipment date.

Sensor Returns

• Normal credit procedures apply to any returned goods and the CTL returns procedure will be followed.