Top Five Reasons to Switch to a Vendor Managed Inventory System

by | Oct 31, 2019 | Supply Chain Management


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When the vendor or supplier is in charge of managing and replenishing inventory, it’s considered a vendor managed inventory (VMI) system. It can be good for everyone, from the company to their clients. With a VMI system, customers get products using fewer transactions. This can cut costs in many ways. Here are five reasons to switch to a vendor managed inventory system.

Distributor and Manufacturer Benefits

A VMI spreads the risks and gain access to new markets, have better communication, streamline supply chains and reduce costs. They also help create a stronger partnership between the manufacturer and distributor so they both have a better understanding of how the other organization operates.

Reduce Investment in Inventory

VMI helps reduce a lot of the extra costs associated with inventory management. For instance, it helps manufacturers avoid rush orders and having too few or too many products in stock.

Easier to Adjust to Market Demands

Implementing a vendor managed inventory system allows distributors to adjust inventory levels in real-time. This makes it much easier to meet supply and demand trends in a timely manner. The end result is, of course, maximizing sales and profits.

Paperless Transactions

VMI systems use cloud technology for storing data and it can also hold receipts and electronic records. If you choose to consolidate invoices and receipts, it’ll be easier to manage orders and deliveries electronically, while making it more convenient for the vendor and manufacturer to communicate. You’ll also reduce paper waste so you’ll be a greener company.

Improved Product Management

VMI is a lot more streamlined than traditional means of managing stock. Since it’s automated, employees won’t have to count every product manually. Automatic counts are not only more accurate, but they also help conserve staff time and company resources.

Ready to learn more or switch to a vendor managed inventory system? Visit the Demand Solutions website to speak with a professional about its benefits.

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