There are numerous benefits
to both the Manufacturer & Distributor. Here is a
Data entry errors are greatly reduced due to computer to computer communications.
The speed of the
processing is also improved.
Both parties are interested in giving better service levels to the end customer. Having the
correct item in stock when the end customer needs it, benefits all parties involved.
A true partnership is formed between the Manufacturer and the Distributor. They work
closer together and strengthen their ties. This benefits of a
stronger partnership goes beyond VMI.
Stabilize the timing of Purchase Orders - PO's are now generated on a predefined
basis. Example: A once/twice Weekly purchase order cycle.
The goal is to have an improvement in Fill Rates from the manufacturer and to the end
customer. Also, a decrease in stockouts and a decrease in
overall inventory levels.
Planning and ordering cost will decrease due to the responsibility being shifted to the
The overall service level is improved by having the right product at the right time.
The manufacturer is more focused than ever in providing great service to the distributor and the end customer.
Visibility to the Distributors Point of Sale data makes forecasting for the manufacturer easier.
Promotions can be more easily incorporated into the inventory plan.
A reduction in Distributor returns due to improved ordering.
Visibility to Stock Levels helps to identify priorities - replenishing for stock or a stockout?. Before Vendor Managed Inventory, a manufacturer has no visibility to the quantity and the products
that are ordered. With VMI, the manufacturer can see the potential need for an item before
the item is ordered.
The information on this website is the opinion of the
webmaster. It should NOT be used as the sole information source when
implementing a VMI program. If you are starting or are currently involved in a
Vendor Managed Inventory program, we strongly recommend that .you work with a