Vendor Managed Inventory

Vendor-managed inventory (VMI) is stock which is housed or stored at the sales or manufacturing facilities of any producer or outlet. This inventory, however, is owned by the supplier. VMI is a streamlined approach to inventory management and order-fulfilment.

The supplier or vendor owns the input inventory and is responsible for managing the inventory of the consumer, often in the consumer’s premises. In this way, the supplier has access to information on the consumer’s inventory, sales, and production.

VMI is delayed purchasing, in which the supplier owns the inventory until the time of actual use.

Benefits

• Shared risk
• Better communication in the supply chain
• Demand forecasting becomes easier

Synonyms For Vendor Managed Inventory

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