How to Implement Vendor Managed Inventory Successfully
In today’s fast-paced business world, managing stock levels effectively is more important than ever. One method that helps companies stay ahead is vendor managed inventory (VMI) . In this system, the vendor (supplier) takes responsibility for managing the inventory levels at the customer's location. This can lead to fewer stockouts, lower costs, and better relationships between suppliers and buyers. But how do you actually implement VMI successfully? Let’s break it down in simple and easy words . 1. Understand What Vendor Managed Inventory Means Before you begin, make sure everyone involved understands what VMI is. In this setup, the vendor tracks the inventory and decides when to restock based on agreed-upon levels. The customer provides access to inventory data , and the vendor ensures products are available when needed. It’s not about giving away control – it’s about sharing responsibility. 2. Choose the Right Partner VMI only works ...