Vendor Managed Inventory (VMI)
When a manufacturer has excess inventory not adding value to the process, the inventory is hurting the company’s balance sheet. Having excess physical inventory on hand increases the need for expensive warehousing space and the risk of obsolescence. Instead of being an investment, inventory value depreciates upon receipt from the supplier. Having the bare minimum on hand to sustain production is the delicate balance of supply chain management.
While there are a few different variations of VMI, they all operate under the same principle: by ordering materials only when they are needed, businesses maximize efficiency, minimize costs, reduce stock outs, and increase profits.
Benefits of VMI with CFS include:
- Removal of safety stock
- Lower inventory levels
- Reduction in purchasing-related admin costs
- On-site CFS masking experts
- Free delivery
Utilizing a well-implemented VMI system will not only improve your balance sheet but will also cut many other wastes out of the overall process and put you on your way to having a lean inventory. VMI is not a one-size-fits-all system but highly adaptable for many different requirements. Give us a call today to learn how CFS can be your VMI partner.