Vendor Managed Inventory (VMI) is a great process for managing both fast and slow moving stocked products.Suppliers in a wide range of industries use VMI as a collaborative process with both retailers and wholesale distributors.
As a supplier, VMI is for you if:
- You want to build stronger relationships with key trading partners where you will work together to maximize mutual sales and profitability.
- You are willing to work collaboratively with key trading partners to achieve mutually defined performance metrics for their inventory, turns and service levels.
As a distributor or retailer, VMI is for you if:
- You want to build stronger relationships with key suppliers where you will work together to maximize mutual sales and profitability.
- You are willing to trust key suppliers to manage your inventory of their products around mutually defined performance metrics for inventory, turns and service levels.
But VMI is not necessarily appropriate for all trading partners.Suppliers, distributors and retailers typically choose VMI partners that:
- Represent a substantial level of sales
- They trust to work collaboratively on a daily basis
- Have the basic system capabilities needed to share data
One of the questions most distributors will ask before implementing VMI is, "What's in it for me?" The answer is always, "It depends." Many of the benefits of VMI, such as better communication and better customer service are difficult to quantify.
However, the value of reducing inventory, reducing returns and increasing sales can be quantified with a little effort. To help quantify the benefits in bottom line impact that a distributor may see we have developed a benefits estimator.
We would be happy to estimate the benefits you or one of your distributors could receive from Datalliance VMI. We can calculate estimated benefits by collecting some basic facts about the business such as average sales and inventory values. We can even run 2-3 scenarios for comparison purposes.
Datalliance Vendor Managed Inventory Demo
If you would like to see this demonstration, please contact us to setup a time with a sales representative.
If you would like to have us calculate the potential benefits for you or one of your distributors considering VMI, just let us know and we will contact you to set up a time for a short phone call to collect the required information.
VMI not only helps increase sales for us and for our distributors, but it also allows us to build stronger, more loyal customer relationships. In addition to being the preferred supplier based on product quality and price, we want our customers to recognize us for superior service.
Craig Young VSM Director of e-Commerce, SKF
Store-by-store…we’re now replenishing the SKUs that sell, when they sell, no more and no less. This has resulted in significant sales increases for us and our retailers. Because we have the right product at the right retail location, at the right time, we don’t lose sales opportunities any more. This obviously is a tremendous benefit for both of us.
Debby MacFarlane Director of Process Development, E1 Entertainment One
Not only did we see VMI as way to reduce the transaction cost for each order, but we also felt it would allow us to reduce the total number of purchase orders...At one time we ran a VMI system in-house and had all of the challenges with hardware and software issues, data quality, and data transmission. Now Datalliance handles all of those issues for us and we focus on building stronger, more effective customer relationships.
John Riley Manager of e-Commerce, Hubbell