Vendor Managed Inventory (VMI) systems are incredibly powerful. Not only can they massively boost your own business performance, regardless of which side of the supply chain you sit on, but they can cause major improvements to the entire supply chain as a whole.
As a Supplier
VMI systems put the responsibility of the supply chain in the hands of the supplier, meaning that they effectively have near-complete control over what gets restocked and when. This not only means that you can supply things as they are needed but confers multiple other benefits.
The extra level of control can be a major boon to suppliers since it gives them a break from clients who might order things at the last moment or require emergency orders. They receive a lot more information and data about what their clients want and can react a lot faster to sudden changes.
This additional data is also a valuable tool for learning more about the business arrangement and the way that products are selling. Suppliers can dynamically adjust how much they supply to their clients, giving them a lot more flexibility in how they operate as a company and the way that they are being restocked.
This kind of system can provide extra goals to the supplier, letting them obtain more information about flaws in their supply chain. Since they have a direct connection to the whole supply system, they can identify areas where they might be falling behind or are unprepared for more clients.
As a Customer
A VMI supply chain is also a very valuable tool for clients and customers. While they do not offer the same advantages that suppliers get, they are still very useful and can be a helpful tool for all kinds of supply chain issues or concerns. On top of that, they can be a great alternative to other, more complex systems.
Having this kind of direct connection to the supplier allows for easier communication and quicker responses, which can allow for much stronger business relationships. It also lets both companies work together closely if they need to but still gives them room to stay at arm’s length.
Collaborating properly with another company can strengthen both companies and means that you have a supplier close at hand if anything major ever changes. Since you are already sharing information with them through the VMI system, there is no need to constantly update them on your situation.
While some companies may not like putting their supply chains in another company’s hands, it means that you can free up employees to work on other important projects. This added flexibility can make a big difference in a smaller office where every employee counts.
A VMI arrangement is very easy to adjust and can be altered to suit your needs at almost any time. You can sit down with the supplier and talk to them about what you need, what you want to change, and what kind of system works best for you – even if you have already been partnered up for a while.