Vendor managed inventory – or VMI for short – refers to inventory management controlled by the supplier. The supplier has access to the customer’s stock levels and requirements and ensures that the customer is optimally supplied with auxiliary and operating materials. Not only is current inventory recorded electronically, but consumption is also analysed and both inventory levels and supply chains are optimised.
VMI solutions
There are various options for implementation using vendor managed inventory.
Here we present two possible systems.
VMI with e-Kanban
With the e-Kanban system, employees can pick the required C-parts directly from the shelf. Reordering and optimised demand determination is done electronically. The supplier is responsible for reordering and restocking the shelves, and therefore for the smooth supply of auxiliary and operating materials.
VMI with smart vending machines
The desired materials can also be taken directly from the vending machine. The difference is prior identification using an RFID chip. This allows withdrawals to be assigned to cost centres and departments straight away. This transparency enables better determination of requirements and more accurate billing by cost centre. Here too, reordering takes place automatically via an electronic signal to the supplier.
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Benefits of VMI
Supplier-controlled inventory management has a number of benefits for the customer:
- Reduction of internal bureaucracy
- Reduction of process costs in procurement management
- Rapid response to fluctuations in demand
- Reduction of stock levels
- Improved transparency of stock levels
- Demand-orientated delivery close to the workplace
