One of the main benefits of using VMI is the savings from holding and managing inventory. VMI gives the supplier full visibility of demand and better information about factors such as lead time, product launches, and packaging changes, allowing them to better manage order calculations.
By using VMI forecasting tools, suppliers can ensure that they reduce logistics and transportation costs by ensuring that orders are sent in the most efficient way possible, this can be achieved through ensuring that replenishment shipments are sent as close to capacity as possible, without the need to duplicate unnecessary costs.
For retailers, improved management of consignments ensures that the arriving stock is as close to full capacity as possible, thus reducing the time spent processing multiple deliveries.
By sending orders using minimum pack sizes, the supplier can better maintain order quantity factors, so there are fewer problems with order quantity calculations.
There isn’t a single answer to what the minimum pack size is. The minimum pack size depends on the specific agreement between the vendor and the customer. Minimum pack size is the smallest quantity of goods that the vendor is willing to send to the customer and still be able to maintain a stable supply chain.
Minimum pack size can be based on many different factors, like:
Product type
Product size and weight
Warehouse capacity etc.