The Concept of Vendor Managed Inventory (VMI)

The concept of vendor managed inventory (VMI), is a business model in which the buyer of a product provides certain information to a supplier or vendor of that product at the supplier takes full responsibility to maintain the certain inventory level of any SKU at the location of your buyer’s consumption; either it is a store, a third-party logistics provider (3PL) also involves in to ensure that the buyer has the required level of inventory by adjusting the demand and supply gaps.

Elements for Effective VMI (Vendor Managed Inventory)

• Integration
• Transparency
• Control

Advantages of VMI for Supplier & Customers

• The chance of error is reduced due to system to system communication along with the high speed of processing. 
• The main benefit of VMI is to make available the required product at the right time, and both parties are involved to satisfy the end customer need. 

To Study further about Vendor Managed Inventory, please visit the link below:

https://businessquora.com/the-concept-of-vendor-managed-inventory-vmi/