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What is VMI inventory management?
How can VMI improve supply chain efficiency?
What is supplier-Managed Inventory (VMI)?
What is a VMI supply chain model?
VMI, also known as supplier-managed inventory from a customer’s point of view, is a data-driven initiative where suppliers manage the inventory levels of their own products, components, or materials at the on-site location of the vendor or distributor. This helps to reduce both shortages and surpluses.
Vendor-managed inventory (VMI) is a collaborative supply chain management strategy where the vendor (supplier) manages the inventory levels at the customer’s location. This management involves the vendor monitoring stock levels, forecasting demand, and replenishing inventory.
- Reduce Safety Stock
- Lower Inventory Levels
- Minimize Overhead and Risks
- Lessen Inventory Shrinkage
As the vendor has more control over inventory planning and stock management they help mitigate oversupply based on demand forecasting. Thus, eliminating the need for carrying safety stocks and the risks associated with it.
With the suppliers being in charge of inventory, the chances of inventory-related issues are minimal. How’s it achieved? By maintaining low inventory levels and conducting frequent shipments to reduce stockouts, overstocking or stock expiration.
Buyers can potentially reduce inventory and storage space since excess stock carrying is reduced. This means lower overhead costs on facilities and warehouses. Additionally, lower upfront expenses helps buyers minimize the risks associated with fluctuating demand since they don’t have to worry as much about excess stock piling up.
Damaged goods, shoplifting or expired products — these are all terms associated with shrinkage, and writing these off are part of owning inventory. How do you minimize it? By maintaining limited stock on hand. Compare Top Inventory Management Software Leaders
Jan 29, 2024 · The VMI supply chain model is one of the most effective inventory management processes and helps smooth out the entire supply chain. Read on to learn how VMI works, discover its benefits and challenges, and see real-world examples of VMI in practice.
Apr 19, 2024 · Vendor managed inventory, or VMI, is a collaborative strategy that differs from traditional supply chain models by bridging the gap between suppliers and retailers to make inventory management a shared responsibility.
Vendor-managed inventory (VMI) is an inventory management practice in which a supplier of goods, usually the manufacturer, is responsible for optimizing the inventory held by a distributor.
Jun 2, 2023 · Vendor-managed inventory (VMI) is when a vendor, not you or your business, manages all aspects of inventory and supply logistics. The vendor and the business share inventory reports, sales data, and other information to maintain the right stock levels.
