Efficiency means being able to provide customers with products in fewer transactions. A vendor managed inventory system can result in lower costs for purchasing and receiving. There are plenty of reasons to work with businesses that employ such a system. Here are five of them.
Benefits for Both Manufacturer and Distributor
The use of a vendor managed inventory system (VMI) can benefit both the distributor and manufacturer. There is a shared risk of investing in new markets, reducing costs and streamlining supply chains. Using a VMI system can help create stronger partnerships and allow both to better understand operations.
Reduce Investments in Inventory
When manufacturers can avoid rush or emergency orders, they can prevent both over and understocked inventories. With a vendor managed inventory system in place, it can help reduce extra costs associated with managing inventories.
Easier to Make Adjustments to Market Demand
A VMI system helps distributors automatically adjust inventory levels to suit real-time trends along the supply and demand chain. This is beneficial for manufacturers who need to maximize both sales and profits.
Paperless Operations
VMI systems make use of cloud technology for storing data, which can store electronic records and receipts. Invoices can be consolidated so orders and deliveries can be electronically managed, while also facilitating communication between manufacturer and vendors.
Improving Inventory Management
A VMI system is more streamlined than the traditional systems used to manage inventory, which needed employees to manually account for inventories. VMI systems are automated and more accurate, while conserving staff and company resources.
