For some companies, maintaining inventory is a costly and time-consuming process. Having too much product in-house means spending too much money before you need to do so, straining capital resources. On the other hand, a lack of supplies means a slowdown in production and, in some cases, potential customer failures. To avoid this, you may wish to consider vendor managed inventor (VMI) and how it can work for your business. Could it be a good option for you?
What Can VMI Do for You?
When you move to a vendor managed inventory (VMI), you gain a number of benefits. The biggest one comes from lower overall costs. You can reduce costs across your business’s activities. This includes lower inventory costs, as well as lower freight costs, reduced procurement costs, and improved accounting accuracy (and lower costs here, too). You may also see lower costs in sourcing materials, purchasing, and receiving. This is, by far, one of the best ways to reduce costs overall.
Improving Your Supply Chain
The supply chain industry continues to struggle under the weight of too few workers. Tightening capacity means that it costs more for you to ship the product. You can avoid that by improving your supply chain process. This ensures you have the right product in place when you need it, but not necessarily before that time. As a result of this, you can reduce your costs but improve your overall success in fulfilling orders as well.
Not every type of business will benefit from vendor managed inventory (VMI), but many can. Consider what a shift in this area could do to the way you operate your business. You may find it is a decision you should have made years ago because of its benefits.
