How Can Vendor Managed Inventory Benefit Supply Chain Management?

It can be a huge challenge to manage inventory at the enterprise level with an efficient system to accomplish the never-ending task. The job of inventory management involves changing costs and demand projections. With vendor managed inventory services, you have a solution that provides strategic integrations between customers and suppliers, enhancing the efficiency of the supply chain. At Field, we have the vendor inventory management solutions you need to enhance the efficiency of your operations and increase your bottom line.

Vendor Managed Inventory (VMI) Benefits

VMI helps streamline business operations at each stage of the supply chain, enhancing financial performance. It creates a close relationship between suppliers and customers, placing the supplier in control of the customer’s inventory. It helps align customer and supplier inventory requirements.

VMI delivers multiple advantages to suppliers over traditional supply chain management.

These include:

  1. More Efficient Process and Reduced Costs

With VMI, since the supplier is in control of the customer’s inventory, they're able to achieve exceptional efficiencies throughout your production floor. The data in the ordering process under VMI is usually more up-to-date and accurate, which leads to cost savings.

  1. Better Adjustment of Inventory to Customer Demand

With vendor managed inventory services, the supplier also controls replenishment. This allows changes to inventories on a dynamic basis according to customer demand. VMI enhances the responsiveness of the supply chain to new initiatives, seasonal changes, and special promotions.

With the ability to minimize demand variability, OEM’s are better able to synchronize manufacturing lead times. This enables them to carry a lighter inventory of finished products. This results in fewer disruptions from stock-outs, reduced carrying costs, and a reduction in other inefficiencies.

  1. Improved Cooperation with Customers

The successful implementation of vendor inventory management solutions develops through cooperation between suppliers and customers. VMI tends to enhance the relationship between suppliers and customers. In this arrangement, customers are able to gain a competitive advantage due to the on-time delivery and exceptional service VMI facilitates. Customers learn they can take advantage of a VMI program to enhance day-to-day operational results and also for special programs.

  1. Enhanced Data Analytics

VMI programs utilize customers data in a sophisticated way that enhances the entire supply chain operation. Although the warehouse benefits from this level of sophistication in data analytics, the benefit extends to enhancing the performance of sales managers and creating improved relationships with customers. The supplier gains greater understanding of the marketplace as customers provide better data and in greater quantities.

  1. More Sales

The VMI process enables the vendor to gain a better understanding of customer demand. As a result, the supplier serves as a better partner to its customers, which tends to promote greater sales.

For information about the vendor managed inventory services we offer at Field, give us a call today at 815.637.9002 or fill out our contact form and leave us a message.