For many businesses, inventory management is critical to being able to get the job done. For service companies and distribution centers, knowing that the required inventory is always on the shelves is essential in all aspects of the business.
Keeping inventory managed can be a challenge for a business. While software that allows scans into inventory is helpful for receiving, if items are not scanned out at a POS terminal, there is always the risk of low inventory resulting in lost sales and service potential.
To address this issue, many suppliers and vendors offer a vendor managed inventory system. This takes the responsibility of maintaining specific inventory levels from the business and transfers it directly to the vendor/supplier/manufacture depending on the nature of the product and the type of business.
Planning and Coordination
With the use of the vendor managed inventory system, the customer and the vendor work together to establish the optimal inventory levels. In the case of a distribution center, the coordination can even extend to the end-user. This ensures that the inventory levels are always maintained within a specific range to allow for order processing without delays to restock.
JIT Order Processing
One of the latest and most important services that a supplier can offer is a JIT or Just In Time delivery to their customers. This allows the customer to only order the amount of inventory needed for a specific amount of time, then having a shipment provided as required. This saves on inventory cost as well as space.
For the distributor or company working with the manufacturer or vendor, having a vendor managed inventory system allows for easier setup and coordination of these JIT orders. Not only does this benefit the seller but it also streamlines the receiving and shipping process, saving both time and money.
