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Technology Sweetens Supply Chain Profitability

I love the five-pound bags of assorted candy. I love seeing the colors, brands, and types of confectionery goodness waiting to be consumed. However, the experience is always somewhat tainted. Fast-forward to three weeks of digging through the bag and what remains is banana-, root beer-, cinnamon- and other foul-flavored candies that really should be banned. I wish I could tell the manufacturer what to put in the bag (and what to leave out), then my sugar-fueled high would be so, so much more enjoyable. Luckily for distributors of industrial and consumer goods, technology exists that allows them to tell manufacturers this kind of information.

Technological platforms, like vendor managed inventory (VMI), enable distributors to communicate to manufacturers what’s selling, what’s not, and the predicted demand for specific items. These rich data points allow manufacturers to better supply distributors with the right products, appropriate quantities, and at the right time. And, unlike my five-pound bag of candy, the distributor only receives product that it wants – saving money and time for the manufacturer and the distributor.

Related Links: Datalliance Receives Consumer Goods Technology Magazine Readers’ Choice Recognition

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How the VMI Technology Platform Enhances Profitability

Suppliers
  • Ship needed products; reduce returns
  • Demand estimation produces right-size orders
  • Fewer rush orders
  • Stabilize production output
  • Less time spent fixing orders
  • Opportunities to sell additional products
  • Fuller trucks; reduce transportation costs
Distributors
  • Receive products that will sell
  • Less wasted warehouse space
  • Higher in-stock percentages
  • Predictable shipments
  • Less time spent ordering
  • More time spent optimizing product offerings
  • Less dock congestion

To learn more about vendor managed inventory (VMI) and how it can enhance supply chain opportunities for profitability, contact us! We can help you build better vendor relationships and improve customer service.


About the Author
Tom Hoar is a Director at Datalliance. Tom has transformed how the electrical industry views VMI by helping 29 electrical manufacturers and 160-plus electrical distributors leverage the value of the VMI process. Hoar is currently expanding the geography of VMI by educating suppliers and distributors in Europe on the value that VMI brings to manufacturers and distributors. He consistently attends industry events encompassing the datacom, electrical and utility segments. He can be reached at thoar@datalliance.com.

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