Home Information How to use Vendor Managed Inventory (VMI) Supply Chains

How to use Vendor Managed Inventory (VMI) Supply Chains

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A vendor-managed inventory system is a very useful tool, but only if it is used correctly. Handling it correctly is important for making sure that you actually get the benefits that you want, rather than struggling against a new system that you can’t properly handle.
But how do you actually use a system like this properly, and what is it for?

VMI as a safety net

One of the biggest advantages of a VMI system is the supplier’s control over what they send you. While it might sound like a disadvantage at first, it can have a huge range of benefits when your business is actually having to balance multiple independent products.
For example, the supplier might send you more of something that is selling well and in high demand but send you less of something that you might not be able to sell off in large amounts. This gives you an extra level of safety, preventing you from buying too much of something that you will never sell off.

It also leads to much more collaboration with another company, which can sometimes be important for avoiding some common issues. They might let you know about any possible scams going around or make sure that you have access to important data that you have not been able to gather yourself.

VMI as a sales tool

VMI systems offer you more ways to sell your products and can even work as a sales tool for drawing in more customers. If you are a business that is buying from a supplier, then the faster delivery times and extra data can help you draw in more customers of your own.
There is also the fact that VMI systems can help smaller businesses free up employees. If you only have a small office and a handful of employees, then putting your supply chain in the hands of another company can help you keep an extra pair of hands involved in other, more serious projects.
As a company, there is an obvious reason to use a VMI system. While it gives you more
work, it also allows you to get better control over what you are sending your customers and opens you up to a deeper business relationship that might be very profitable in the long run.

VMI- as- sales- tool

VMI as a tool

VMI offers a lot of special features and benefits that no other supply chain system can give you, opening up more possibilities when it comes to working with new companies. Your symbiotic connection with them gives you both access to a lot more data regarding your business activities.

This data might include things like sales numbers, the popularity of particular products, extra ways to market your own products, or even just selling prices. These are small things, but they can add up, especially in the data-driven modern business world.
There is a lot of potential in using a VMI supply chain, and they can be heavily adjusted to match almost any kind of situation or market. The only limits are your own business limits.

mm
Puneet Jain
A virtual SEO expert, content writer, and digital marketer.

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