Why do Vendor Managed Inventory? What are the Benefits?

"A well-structured VMI agreement has the potential to provide benefits for both the supplier and customer. If each partner concentrates on its core competences, both firms can increase their productivity and profitability." Jon Schreibfeder Effective Inventory Management, Inc.

"We are able to manage three times more business with our suppliers doing VMI than with our non-VMI suppliers." Steve McEnany Assistant VP of Marketing and eCommerce Midwest Wheel

"VMI changes the level of trust between supplier and distributor. We become closer to our customers." Tim Bauer Operations Project Manager Arvin Meritor

Vendor Managed Inventory (VMI) has consistently provided significant advantages for both the supplier and customer.

For the customer

For the customer, VMI results in increased profitability due to:

• Reduced inventory/increased turns
• Reduced administrative costs
• Fewer stock-outs or shortages
• Increased sales (for distributors and retailers)

Learn more about VMI benefits for the customer >

For the supplier

For the supplier, VMI results in increased profitability due to:

• Increased sales
• Reduced operating costs
• Stronger customer relationships

Learn more about VMI benefits for the supplier >

For both parties

For both parties, VMI also provides:

• Better information for planning (e.g. demand visibility)
• A closer, more effective working relationship - both parties work together to sell more to and/or better serve end customers

The Keys to Success with VMI >

Learn More...

• White paper: "Business Results from VMI: Two Year Cumulative Study">
• Calculate your potential benefits now>