5 Reasons You Should Work With Vendor-Managed Inventory Systems

Posted by Hugh Watson | December 11, 2017 1 Comment

Vendor-managed inventory (VMI) — a supply chain process that streamlines inventory procedures by putting the vendor or supplier in charge of managing and replenishing a manufacturer’s inventory — can be hugely useful for both the companies employing these systems and their clients.


Here at Assembly Fasteners, Inc. (AFI), we make use of a number of specialized VMI programs in order to provide added value to our customers while reducing our overall costs. Our newest VMI system — Assembly Virtual Inventory System (AVIS) — uses SmartBins to automatically track the number of parts in a bin and determine when part refills are needed. AVIS then collects and stores this data in a cloud system to generate automatic stock orders.

With VMI systems like AVIS, we’re able to supply our customers with high-quality products while requiring fewer transactions and allowing for lower purchasing, receiving, and quality costs. Below are five great reasons to employ — or work with a company that employs — VMI systems.

  1. 1. Both the manufacturer and distributor benefit
  2. The use of VMI is mutually beneficial for vendors/distributors and manufacturers, as both companies share the risk of investment while gaining access to new markets, fostering better communication, reducing costs, and streamlining supply chains. VMI systems also create a stronger partnership between the distributor and manufacturer by giving each a better understanding of the other’s organization and how they operate.
  3. 2. Reduced inventory investment
  4. By helping manufacturers avoid costly emergency or rush orders and preventing under- or overstocked product inventories, VMI can help reduce many of the extra costs associated with inventory management.
  5. 3. Adjustment to market demand
  6. Utilizing VMI allows a distributor to automatically adjust inventory levels in order to fit supply and demand trends in real time, helping the manufacturer maximize sales and profits.
  1. 4. Go paperless
  2. Since VMI often uses cloud technology to store data, it can easily hold electronic records and receipts. By consolidating invoices and minimizing transactions receipts, VMI also makes it easier to electronically manage orders and deliveries while facilitating communication between the vendor and the manufacturer. VMI systems also help companies create a “greener” footprint by reducing unnecessary paper waste.
  1. 5. Improved inventory management
  2. Since VMI is much more streamlined than traditional inventory systems and makes use of automated inventory counts, it obviates the need for employees to manually conduct physical inventory counts. Not only are automatic counts more accurate, they also help conserve valuable staff time and company resources.

Learn More

Vendor Managed Inventory Programs eBook: Download Now

For more than three decades, AFI has been providing the world with fastening solutions unmatched in performance and reliability, and our specialized VMI programs have allowed us to provide customers with the highest-quality products at the lowest possible costs.

If you’re interested in learning more about our VMI programs or would like to discuss your fastening needs with an AFI expert, contact the team today.

Topics: fasteners, vendor managed inventory