Vendor-Managed Inventory in Supply Chain Strategy

Vendor-managed inventory (VMI) is a model where suppliers manage inventory levels at the buyer’s location. This can boost efficiency in the supply chain of a company. To build a VMI-based system, select trustworthy vendors and agree on stock thresholds, delivery schedules, and data-sharing protocols. VMI reduces stockouts, lowers carrying costs, and streamlines replenishment. It also strengthens supplier relationships. Implementing VMI requires coordination and technology, but it shifts inventory burdens and boosts responsiveness. When done right, it transforms your supply chain into a lean, shared ecosystem.