Optimizing Output Through Vendor Managed Inventory


In any business that deals in physical products, its inventory is its number one concern. Having a surplus means potential wastage and reduced efficiency, while having a deficiency means the inability to fulfill orders. Both situations are potentially disastrous to the business, and need to be prevented at all costs. As such, having an efficient inventory management solution is invaluable to any business.


A vendor managed inventory (VMI) system is where the supplier or vendor holds the products until needed by the customer. This method has a variety of benefits over the traditional inventory system for both parties involved. The customer benefits because they can maintain a constant inventory much easier and are in a better position to negotiate with the supplier. The supplier benefits too, since they’re guaranteed business with the customer. The main benefit for the customer is the ability to have a constant inventory, but this requires a high level of inventory visibility between both parties.


The aforementioned benefits of VMI cannot be achieved without a sufficiently high level of inventory visibility. This is required due to the extra step in the inventory process. In a traditional system, all inventory used was held within the same company, meaning all relevant members of the company could use an in-house system to monitor the inventory levels. In a VMI system, however, the supplier often doesn’t have access to the company’s in-house system, leaving them in the dark about the current inventory requirements. As such, implementing an inventory visibility solution that works for both parties is absolutely essential to reap the benefits of VMI.

TPSynergy has an advanced inventory visibility system that seamlessly integrates into both you and your supplier’s in-house ERP systems. Contact us to learn more or visit our product page for more details: https://www.tpsynergy.com/supplychain-inventory.