DUAL BENEFITS:

• 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.

DISTRIBUTORS BENEFITS:

• 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 Manufacturer.
• 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.

MANUFACTURERS BENEFITS:

• 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.

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