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What Is VMI? | What Is Vendor Managed Inventory?

Richard Gallacher
May 15, 2018

Inventory or stock refers to the goods and materials that a business holds for the ultimate goal of resale. Whilst keeping abreast of shop floor replenishment can often represent a significant challenge to retailers, with too much or too little stock causing serious financial burden, Vendor Managed Inventory (VMI) places the responsibility of replenishment and stock restoration with the supplier.

VMI is a demand driven, continuous process of replenishment which ensures that each buying organisation has the right stock, in the right place at the right time. Through a dual relationship, the supplying organisation is alerted to the retailers dwindling stock levels and can respond immediately, a stock replenishment recommendation is sent to the supplier and once approved inventory can be replaced. The Telegraph state that ‘holding big stock is very old school… The more you hold, the more space is required, which leads to bigger overheads. Stock really is dead money.’

Recognised as the leading supplier of VMI services, TrueCommerce Datalliance manage billions of pounds in orders every day. We accelerate supplier responsiveness by automatically generating demand driven orders for your customers systems in their desired format. By taking a proactive approach to inventory control we equip both buyers and suppliers with the capacity to maintain optimum stock levels and increase sales by up to 24%.