A vendor managed inventory system, or VMI, is a new and more focused method of attaining inventory management and keeping up with timely order fulfilment. VMI involves a strong communication and collaboration between suppliers and others involved in the process of selling their goods and services. This could include distributors, retailers, customers or product users. This new approach to vendor relations is set to drastically change the traditional ordering and vending process for retail businesses.
Vendor Managed Inventory System
The goal of VMI is to bring business aims into alignment and modernize fulfillment and operations for the suppliers, as well as their customers. An increased value in vendor relations and investments is a direct result of improved information flow. It can:
- Improve inventory turn around and ordering services
- Improve overall vendor services for all parties
- Increase sales and create higher profit margins over the long run
When implementing a vendor managed inventory system, it monitors actual activity and compares it to predetermined goals and other trends in vendor relations. The system then transfers that same information to both the supplier and the customer. This is done in order to keep the process as transparent and open as possible. Information should be freely changed and always available because open lines of communication and honest data sharing is essential to its success in the long run.
Important Considerations
Successful vendor managed inventory system are all about the details. In order for this seemingly simple process to run smoothly, key points must be addressed, such as:
- Close monitoring and review of data transmission and accuracy of the data
- The flexibility to draw from and utilize a wide array of data formats
- The ability to use multiple data communication methodologies
- Understanding to quickly adapt as needed and to implement system changes
To get started setting up vendor managed inventory systems, contact Business Name for solutions.