Many suppliers enter into Vendor Managed Inventory (VMI) as a strategic initiative to build stronger relationships with their distributor or retail trading partners. Others do it as part of their move to a lean, demand-driven supply chain. Often suppliers find that the quickest benefit is increased sales.
- Increased Sales Increases in the 5%-25% are not uncommon in a new Vendor Managed Inventory (VMI) relationship.
- Reduced Operating Even though the supplier takes on the responsibility for replenishment in a VMI relationship, operating cost savings alone can easily offset the costs of doing VMI.
- Stronger Customer Relationships VMI is one of the best tools available to suppliers for building stronger customer relationships.
Suppliers often have a number of questions and concerns when considering a Vendor Managed Inventory (VMI) program. Here are some common questions suppliers often have about beginning a VMI initiative or entering into a VMI relationship with a particular customer and how a good VMI solution addresses those concerns.
Common Supplier Questions
- Will it be a huge effort to implement VMI? Without the right VMI solution partner it could be. But a good partner will provide all the tools, guidance and support you need.
- Our IT department is already over-worked. How will they have the time to implement VMI? The impact on IT can be minimal using a ready-to-use cloud-based service.
- Will my costs to operate VMI get out of hand? Using a solution offered using the Software-as-a-Service (SaaS) approach will make costs predictable and affordable.