Many of the largest retailers and manufacturers in the World use VMI to optimize their supply chains. This is because the increased sales that are achieved through such a solution easily outweigh any associated costs. Whilst the increase in sales is an obvious outcome of having optimized stock levels on the shelves at all times, there are also some less obvious benefits.
Improved Inventory Turns
Another benefit realized through VMI is what is called improved “inventory turns”. This refers to stock turnover or the movement of stock, in other words, how many times a company has sold and replaced inventory during a given period. By having increased movement of stock, retailers can often free up warehouse space.
Improved Service
Lastly, by providing optimized deliveries, stock levels, turnover and ultimately sales, the knock-on effect is improved service levels and relationships with customers.