VRO in few words
We can distinguish 3 generations of procurement systems.
ROP (ReOrder Point) represents the first generation. Based on an average consumption and a procurement lead time, the Reorder Point is the inventory level which triggers the order in order to receive it before the stock out.
MRP (Material requirements planning) invented in 1960 represents the second generation. In this case, orders are planned based on future demand, procurement times and inventory. Orders are generally for a given period (month, week, day...).
VRO (Visual ReOrder) is part of the third generation. It adds to the previous system a supplier feedback to close the ordering process loop. Quantities to order are calculated based on deliveries schedule and not based on time buckets, to match exactly what is required at each delivery.
Instead of focusing only on the calculation of the quantity to order, VRO defines all stages of the ordering process, roles, tasks, responsibilities and provides visual tools to control it.
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