How Vendor Managed Inventory (VMI) Streamlines YOUR Day!

MINIMIZE STOCK OUTS: With access to real-time inventory data, the vendor can proactively anticipate fluctuations in demand and replenish stocks before they run out. This significantly reduces the occurrence of stock-outs, which can lead to lost sales
STREAMLINED SUPPLY CHAIN: The collaborative nature of VMI leads to a more streamlined and synchronized supply chain. The vendor and distributor work closely together to optimize inventory levels and maintain a smooth flow of goods. This coordination results in a reduction of lead times, production delays, and bottlenecks, contributing to increased inventory turns.
REDUCED INVENTORY COST: Increased visibility within the supply chain removes uncertainties and allows you to lower the amount of onhand inventory.
INCREASE SALES: Reduce your missed sales as a result of improved inventory positioning through VMI.
IMPROVED OPERATIONAL EFFICIENCY: Improve control over inventory and keep inventory levels stable.
INCREASED PARTNERSHIP: VMI fosters a collaborative partnership between the vendor and the distributor. The close cooperation and shared goals in maintaining optimal inventory levels promote trust and understanding between the two parties. This results in smoother operations and a more efficient supply chain.

What is Vendor Managed Inventory?

VMI enhances supply chain management. It is designed to help manage your inventory to ensure that you have the appropriate stocking levels at your location(s). The goal of VMI is to ultimately reduce costs and support your needs seamlessly.

How Does Vendor Managed Inventory Work?

The VMI system receives data (called a Product Activity Report) from a
distribution partner. This report contains data on sales, product transfers
and inventory positions (on hand, on order, in transit)
The VMI platform reviews the data and sends a recommended inventory
replenishment order based on key factors and agreed objectives
The supplier reviews and approves the recommendations
The VMI system sends a purchase order (PO) to the supplier
The supplier sends PO acknowledgement to the distribution partner in an
electronic data interchange (EDI) format
Once the distributor approves the PO, the order can be shipped

How Can You Implement VMI with Merit?

Contact E-Business Program Manager
Introductory meeting to discuss the program and answer questions
Kick – off call with our VMI partner, TrueCommerce Datalliance, to discuss
VMI calculations, process, distributor goals and setup activities
Participate in the setup activities (minimal IT resources needed from the
distributor)
Review test order to ensure the calculations meet expectations
Test EDI 850 & 855
Live PO review
VMI is operational and performance is monitored

2/12/2025 4:40:15 AM