Vendor Managed Inventory or Inventory Supply and Management, is a great way for customers to reduce their costs. When your vendor manages your inventory you no longer have to expend the costs to discover your deficit, purchase it, receive it, and put it on your shelf.
The key to a successful program is to agree on prices, material and the amount you want to be kept on your shelf. When your vendor is managing your inventory, it is easier for you to keep less on your shelf and have it replaced more frequently and in a timely manner. More turns on your inventory and less dead stock means more discretionary money to support the rest of your operation.
Written By: Mark Greene, Vice President of Business Development at North Coast Electric and an expert in Vendor Managed Inventory.