Vendor Managed Inventory
Vendor managed inventory (VMI) has become the accepted practice in many industries for controlling the manufacture, distribution, and stocking of parts and components. Once considered a novelty, VMI is now considered an effective and cost-efficient strategy for controlling inventory for a wide range of commercial, industrial, and retail companies. At Electronic Fasteners, located in Canton, MA, our VMI services are dedicated to helping our customers improve operational efficiency.
Vendor managed inventory can help you significantly reduce inventory-related costs. There are several benefits to a well-run inventory program, including:
- Reduced data entry and ordering errors.
- Greater right-product/right-time percentage rates.
- Purchase orders are automatically generated on a pre-determined schedule
- Decreased stock-on-hand due to more efficient planning, reducing money and space tied up with unnecessary inventory.
In the fastener industry, studies have shown that 85 percent of fastener costs are directly related to overhead inventory activities such as administration, inspection, and over-ordering – a scant 15 percent of fastener costs is the cost of the products themselves.
For the vendor managed inventory business model, the manufacturer is responsible for generating and maintaining the inventory plan. This doesn’t change inventory ownership, just how it’s managed. The manufacturer sees how much inventory the distributor carries and related sales activities. Based on data received from the distributor (now often using cloud-based applications and user-defined dashboards), the manufacturer generates its own replenishment order to provide just the right amount of inventory to fulfill pre-determined requirements.
Electronic Fasteners helps our customers by:
- Invoicing on a monthly basis.
- Barcode labeling all bins and stocking locations.
- Supplying parts to avoid running out or overstocking.
- Delivering products according to a prearranged schedule.
- Designing a stocking plan optimized to specific inventory requirements.
- Providing customers with comprehensive management reports.
- Stocking product at our warehouse as a backup to on-site customer inventory.
Our vendor managed inventory has helped our customers streamline their supply chain operations, improve inventory turns, and increase sales. If you’d like to learn more about how we can help you efficiently manage your fastener inventory, call our experts at 1-888-890-7780.