Vendor Managed Inventory

Vendor Managed Inventory (VMI)

VMI is a customised inventory management solution where the management of a company’s inventory is contracted out to a supplier.

In this system, the supplier takes responsibility for managing and optimising the customer’s inventory; the supplier monitors inventory levels, and replenishes stock to pre-set levels when needed, for the customer.

In this way, the supplier helps to make sure that:

• Shortages and stock-out situations are minimised.
• the customer gets only the parts they need.
• Overstocking of items/quantities is minimised.

How a VMI System Works

The supplier retains ownership of the inventory but places it at the customer’s facility.  The customer shares their inventory data regularly, e.g. usage forecasts and required minimum/maximum stock levels, with the supplier. Using this information, the supplier ensures timely replenishments and optimal stock levels to meet the customer’s demand requirements.

Features:

• Inventory is stored on-site at the customer’s location.
• The customer provides regular updates on consumption and demand.
• The supplier monitors stock levels and replenishes inventory when it drops below pre-set limits.

The VMI system can be used for individual items or groups of items. It is well-suited for managing small, low-cost consumable items, e.g. fasteners and office supplies, that are:

• Used in large quantities.
• Wide in range and specifications.
• Available from many suppliers.
• High in procurement cost relative to its value, e.g. sourcing, ordering, managing deliveries, inventory management.

Benefits of a VMI System

• Automated stock replenishment – reduces the amount of time and resources spent on monitoring inventory and reordering.
• Reduced inventory carrying costs – only required parts and quantities are ordered and stored.
• Continuous product availability – minimising the risk of stock-out situations.
• Optimised stock levels – by preventing overstocking.
• Streamlined inventory – by eliminating redundant or slow-moving items.
• Customised packaging and labelling is possible.

Thor International VMI Program

At Thor International, our VMI program streamlines and simplifies your inventory management, freeing up your time and resources while ensuring that you always have the parts you need on hand.

With a fully customised approach, we align our services with your operational needs – delivering efficiency, reliability, and peace of mind.