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The Advantages of a VMI Program

The Advantages of a VMI Program
Inventory is one of those necessary evils that every manufacturer seeks to control. The goal is to not sit on excess raw material, tying up large amounts of cash and space, but also not run short, halting production and losing time and money. Having the bare minimum amount of inventory to sustain production is the delicate balance of lean supply chain management.

Enter the concept of vendor-managed inventory (VMI).

For those not familiar with vendor-managed inventory, it’s a business model in which the manufacturer provides a forecast to the supplier of components needed in the manufacturing process, and the supplier takes the responsibility for maintaining an agreed-upon inventory of the item.

Our VMI Program helps to reduce your overhead costs!
Watch the video to learn more.

At Electronic Fasteners, our VMI program provides our customers with several significant benefits, starting with the consistency of pricing that comes with committing to a certain annual purchasing volume based on anticipated need. Quantities delivered throughout the year can be varied based on seasonal or other needs, minimizing the risk to our customers of carrying too much or too little inventory on hand at any given time.

The Advantages of a VMI ProgramOur VMI program can substantially increase the efficiency and cost-effectiveness of your inventory management so you avoid pricing fluctuations and unnecessary shipping costs. But pricing consistency is just one way our customers save money with our VMI program. Studies have shown that 85 percent of fastener costs are related to inventory overhead activities such as administration, inspections, and over-ordering – a mere 15 percent of the fastener cost is the actual item.

Our VMI program enables our customers to:

  • Reduce administrative and other costs
  • Receive more reliable delivery
  • Have more accurate inventory management
  • Improve inventory quality
  • Experience fewer stock-outs

If a VMI program sounds like a good idea for your manufacturing operation, our dedicated VMI department is ready to help you set one up. We’ll design a stocking plan based on your specific inventory needs and deliver your components according to a prearranged plan so that you neither run out of critical parts nor sit on too much inventory, tying up valuable resources.

Your product is stocked at our warehouse, ready to resupply your on-site inventory. We actively monitor your parts status at no extra charge, using bar-coded bins and stocking locations as well as regular inventory management reports that we review with you to ensure the timeliness and accuracy of your inventory supply.

To learn more about our VMI program and all its benefits, contact our VMI department today.