What is the supplier managed inventory?

Seller Managed Inventory (VMI) is a type of business model in which business owners and retailers work to maintain the optimal level of inventory in the retail device or the company's owner's warehouse. Instead of the traditional ordering method, in which the company owner or buyer checks his inventory and then plans the order, a system that allows you to monitor the product levels through a computer program connected directly to the seller is introduced. The seller then automatically supplies the product to the buyer, often even supplies shelves without placing a hand -held order type. In this type of relationship, participants are often referred to as business partners, although this is not to indicate any formal or legal partnership. Between trading, the databisters are transmitted completely without human entry. This happens immediately, which is an advantage for the company owners and the seller, especially because this affects the supplier's ability to modify production. It also occurs in a way that is much less nochylné to errors.

This supplier chain management model uses many larger retailers. Not only will it save time and labor, but also reduces the likelihood that stores and retail stores will run out of products. When the actual display and storage of shelves is a supplier's liability, it is in the best interest of everyone to make it effectively and in a way that shows the product as best as possible.

It may seem that the company owner occupies a vulnerable position in allowing the supplier to control how much product is ordered. However, with the established supplier's established system, responsibility is often shared. This can be in the form of mail order shares in which the seller simply offers goods for the seller and maintains a percentage of sales. The arrangement may also be that if the seller places a product that is not sold, this product may be returned on the basis of previously agreed conditionEC introduced between the relevant parties. The retailer managed inventory is designed to increase efficiency, but also supports more detailed understanding of customer needs from suppliers.