VENDOR MANAGED INVENTORY SYSTEM

What is VMI?

Vendor Managed Inventory /vɛndər mænəǰd ɪnvəntɔri/ (noun) - Vendor Managed Inventory [is the process of providing] a mutually beneficial relationship where both sides will be able to more smoothly and accurately control the availability and flow of goods.

With VMI, a manufacturer or distributor assumes the role of inventory planning for the customer. Extensive information sharing is required so that the manufacturer/distributor can maintain a high degree of visibility of its goods at the customer’s location. Instead of the customer reordering when its supply has been exhausted, the supplier is responsible for replenishing and stocking the customer at appropriate levels
 (1).

An Overview:


VMI is BMB's Vendor Managed Inventory (VMI) system. This program is perfect for companies that do not want the hassle of managing their inventory. Easily keep track of your hardware without the inconvenience of ordering, stocking and organizing your inventory. With VMI, BMB is fully responsible for ordering and restocking any hardware in your VMI system as necessary. We custom tailor all of our VMI programs to meet YOUR requirements and demands. Our VMI customers will work with BMB to set a routine schedule where a BMB team member will stop in and restock any hardware that was at low inventory during the team member's previous visit. After refilling any pre-existing low inventory hardware, the team member will scan any new items with low on-hand quantities. The VMI program is built to work for YOU, setting out to eliminate any extra processes your company shouldn't have to worry about.

Is VMI right for YOU?

Our VMI program was specifically created to alleviate our customer's from the daily hassle of tracking, ordering and stocking their hardware. Studies conducted in recent years have found that the average business spends between 25-30% of their operational budget on managing their inventory. 

A later study highlighted the common symptoms that indicate issues related to inventory management
(2) (3). These symptoms include:

•Increasing time needed to complete job

•Increasing dollar investments in inventory with job due dates constantly being pushed back
•Increasing number of orders being canceled
•Lack of sufficient storage space
•Unnecessary wide variance in inventory
•Deteriorating relationships with middlemen as typified by dealer cancellations and declining orders
•Inventory costs rising faster than sales
•Customers not satisfied
•Inventory turnover too low

How does VMI work?

The Initial Setup: What happens before your VMI program goes live?

SELECTING ITEMS

1The first step in setting up any VMI solution is choosing which items are going to be included in the program. BMB works with our customers to identify the items that are best fit for VMI. The items chosen are typically based on the customer's usage of specific hardware (which items the customer is using the most of).

STORAGE/SHELVING SOLUTIONS

2After selecting which items will be included in the program, it is time for setup. Choosing the best shelving/storage solution for all your items is sometimes the trickiest part. Not to worry! We work with our customers to evaluate the best storage solutions based on available space, the type and number of items included in the program, and of course your personal preference. 

ROUTINE RESTOCK SCHEDULE

3The next step in the process is coordinating a fixed restock schedule. Setting a routine schedule is a vital factor of the VMI program as this is the determinant for when parts will be delivered and restocked. During the restocking process, a BMB team member will refill any items with pre-existing low inventory levels from the previous visit (scanned during last restock date) followed by scanning any items with new low inventory levels to be refilled during next restock date.

BARCODE TESTING/OPENING ORDER

4Last but not least, the last step for the initial setup of any VMI program is testing your custom VMI labels to ensure all items are live & scannable. Upon completing a successful test scanning trial, a BMB team member will demonstrate the procedure that will take place during future visits and conduct the first scan process to be refilled during next restock date.

Standard Restock & Scan Procedure: What happens during regular visitation?

RESTOCK

1A BMB team member will first refill/restock any items with pre-existing low inventory levels that were scanned during the previous restock date. This will ensure that the team member does not scan any items that may have already been scanned during the previous visit. 

SCAN

2After restocking any items with pre-exisiting low inventory levels, the team member will scan any items with new low inventory levels to be fulfilled during next restock date. 

UPLOAD ORDER

3Lastly, the team member will upload all newly scanned items to BMB's order processing system. Your BMB sales associate will then review the scanned items and email the purchaser a quote before confirming the order.