Phrase used to describe the process of a supplier managing the inventory levels and purchases of the materials he supplies. This process can be very low tech, such as an office supplies supplier or maintenance supplies supplier coming into your facility once per week to visually check stock levels and place a re-supply order, or high tech, such as an electronic component supplier having remote access to your inventory management and MRP system and producing and automatically shipping to meet your production schedule. Vendor-managed inventory reduces internal costs associated with planning and procuring materials and enables the vendor to better manage his inventory through higher visibility to the supply chain. Vendor-managed inventory may be owned by the vendor (consignment inventory) or the customer.
A business process whereby suppliers take responsibility for customer inventory and ensure that agreed inventory and service levels are fulfilled.
A manufacturer's management of the inventories inside a retailer's store, including sales forecasting, promotional adjustment/ allowances, ordering and delivery.
The practice of retailers making suppliers responsible for determining order size and timing, usually based on receipt of retail POs and inventory data. Its goal is to increase retail inventory turns and reduce stockouts. Also called VMR (vendor-managed replenishment).
The supplier provides not only the materials, but directly or indirectly, is responsible for managing and replenishing inventory.
a process in which a supplier owns components until they are issued or released to the production line. Usually, VMI is handled by a distributor located within a plant.
The vendor (supplier) manages the stock levels and availability for the customer based on forecast demand.
In the VMI process, the vendor assumes responsibility for managing the replenishment of stock. Rather than a customer submitting orders, the vendor will replenish stock as needed. This process is sometimes referred to as supplier-managed inventory (SMI) or co-managed inventory.
A means of optimizing supply chain performance in which the supplier has access to the customer's inventory data and is responsible for maintaining the inventory level required by the customer. This activity is accomplished by a process in which resupply is done by the vendor through regularly scheduled reviews of the on-site inventory. The on-site inventory is counted, damaged or outdated goods are removed, and the inventory is restocked to predefined levels. The vendor obtains a receipt for the restocked inventory and accordingly invoices the customer. See: continuous replenishment.