Inside the Process of Vendor-Led Replenishment

Inside the Process of Vendor-Led Replenishment

Previously, we covered the benefits of VMI (Vendor Managed Inventory) and described how a company could leverage the process to adopt streamlined, accurate inventory efficiencies, leading to reduced costs, time-savings and more reliable service for your customers. In today’s blog post we delve into more details surrounding the processes in VMI.

The Breakdown

To operate smoothly, VMI must be managed in a collaborative way that aligns all supply chain participants – buyers and vendors – across all inventory touchpoints. By making sure everyone is part of the process, the result is a reliable replenishment infrastructure that yields product security and the lowest possible logistics costs.

As an alternative to more traditional order-based replenishment, VMI empowers suppliers to manage a customer’s inventory and replenish products automatically. Instead of going through the trouble of placing purchase orders, inventory plans and forecasting data are securely communicated in real time, electronically to the supplier. Using a process called Electronic Data Interchange (EDI) or Supplier Assisted Inventory Management software (SAIM), this inventory data ensures complete, automated order processing, which maintains reliability and efficiency.

Most programs are arranged into managing inventory at a designated area near the buyer’s point of use. Depending upon pre-determined minimum and maximum stock thresholds, the vendor can make fast and accurate replenishment decisions, ensuring availability and optimizing just-in-time delivery strategies for effective supply chain performance.

At etaGLOBAL, we have specific VMI offerings for unique client specifications. Selling to manufacturing facilities, we offer self-service, full-service, and a hybrid version of the two. Our self-service option involves us providing product and guarantee replenishment based on received usage and forecast details. Full-service includes us establishing an on-site employee at your manufacturing facility who manages inventory levels, assures replenishment and eliminates stock-outs. Our customizable plan is a hybrid of self-service and full-service wherein we set up cyclical visits based on the customer’s requirements, whether they need us to check-in weekly, bi-weekly, monthly, or quarterly to assess levels and replenish as necessary. VMI could be your company’s solution to precise replenishment and stock-out reduction. Give us a call today to talk VMI options with etaGLOBAL, a leader in Aerospace and Defense supply chain solutions.