Sustainability in Supplier Relations at Volkswagen

Volkswagen AG

Group Research, Environment

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P.O. Box 011/17743

38436 Wolfsburg

Germany

umweltdialog@vwgroupsupply.com

October 2006

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Aerospace and defence companies know it is imperative that they become more responsive to customer demand across their entire range of products – but cannot afford to stock tremendous amounts of inventory to ensure service levels.

Transitioning from a 'push' supply chain methodology to a demand-driven 'pull' approach lets suppliers sense and respond to actual customer demand signals and gain continuous visibility to customer/market activity. In recent years, demand-driven supply networks have dramatically streamlined the amount of on-hand inventory, slashed delivery times, and boosted supply reliability for major aerospace manufacturers and suppliers, including Airbus, Schenker and others.

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The key to the ‘pull’ approach is efficient implementation of vendor-managed inventory (VMI). VMI provides clear, unfiltered demand signals so that the right products are continually pulled into the right places at the right time, with continuous replenishment at the point of consumption.

This white paper shows how to make this approach succeed in relation to the aerospace supply chain.

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