VMI stands for Vendor Managed Inventory. This term has been around for 20+ years and has various connotations and has been called many different things; Bin Stock, Keep Fill, Bread Man Service, SMI…etc.. Many customers have had a bad experience with a “VMI”. They’ve experienced out of control costs, overstocked shelves and inconsistent service.
Some customers may feel threatened by the term “VMI” as it suggests that CED will manage the customer’s inventory and they will lose control of the process, visibility of the costs, and inventory levels will be out of control.
The difference in offering services as opposed to a “VMI”, is that through our multiple reporting capabilities and documented processes, we provide the customer with accurate, valuable and reliable information so they can make informed decisions. They retain total control of the process. It is a collaborative effort.
The program we’ve developed to provide these types of services is comprehensive yet simple in nature and is a successful business model. If implemented correctly, the benefits of a managed inventory program will exceed the customer’s expectations and you will gain additional market share because you are there. A managed inventory program is an open invitation into the customer’s “house” each week. The customer /distributor relationship will grow and through a natural progression it will provide visibility about upcoming projects, competitive products used and the opportunity to become a strategic partner with additional supply chain opportunities.
CED’s methodology for the various managed inventory programs begins with building a solid foundation of evaluating and understanding the inventory needs, determining which solution best fits the customers’ needs, customizing that solution if necessary and documenting the process so it is consistent and repeatable. The very nature of this program demands a commitment from the PC. The worst thing we can do is make a commitment and not keep it – this just adds to the customer’s mistrust of a “VMI” program.
By following our Evaluate, Develop, Deliver and Continuously Improve approach - a managed inventory service (Asset Management) will provide on-going business for years to come.
More information can be found here