Plastic manufacturers can reap enormous benefits when they implement Vendor Managed Inventory. Let's consider how it helps and what plastic manufacturers can do to begin a VMI program.
What Is Vendor Managed Inventory?
Vendor-managed inventory, or VMI, refers to a supply chain management system that reduces inventory risk and cost by giving the vendor complete responsibility for managing inventory levels.
In a typical VMI relationship, the supplier uses real-time data to monitor customer usage patterns and proactively replenish stock as needed. As a result, clients can concentrate on core competencies while ensuring they always have the necessary supplies.
Vendor Managed Inventory Reduces The Need For Storage Space
Storage space comes at a premium. Unmanaged or slow moving inventory occupies valuable space. by implementing VMI it decreases the footprint needed for production inventory.
Poor inventory management can cause chaos in warehouses, resulting in not enough or too much inventory to support production. VMI removes friction and makes the process run smoothly. As a result, plastics manufacturers implementing a new VMI program to control inventory find cost savings they may never knew existed.
Improved Inventory Control with Vendor Managed Inventory
Vendor Managed Inventory benefits customers because they wouldn't have to spend their valuable time scheduling orders and receiving shipments.
Faster turnaround due to a smooth inventory management system offers the opportunity to boost revenues through reduction and procurement costs. VMI creates a virtuous circle that makes the vendor and customer happier as their objectives align.
Reduction In Stockouts And Lost Sales in Plastics Manufacturing
More granular control over inventory counts is enough to consider VMI. Vendor Managed Inventory (VMI) aims to help reduce stockouts and lost sales. With VMI, the vendor manages the inventory fluctuations for the customer.
Vendors monitor stock levels and notify the customer when inventory levels need to be replenished or maintained. This level of oversight helps ensure that there is always enough inventory on hand, eliminating excess inventory and the chances of stock outs.
Why Is VMI Important For Plastics Manufacturers?
Implementing VMI for inventory management removes the guesswork. With this protocol in place, manufacturers gain transparency and better inventory control and a thorough understanding of what is needed for future requirements. This helps customers develop and maintain a more efficient supply chain.
Partnering with Blue Chip utilizing our VMI control software is an essential tool that plastic manufacturers gain numerous benefits. Our system simplifies transactions for our customers to keep track of their inventory levels and plan for future needs.
VMI is a streamlined approach for adding capacity to your existing infrastructure with little to no capital investment. In addition, the system is mutually beneficial as it allows both the vendor and the customer to focus on the primary objectives of running their business.
How to Build a Successful VMI Program with Your Vendor Partner?
VMI programs are becoming more and more popular with plastics manufacturers. The benefits of VMI programs result in lower costs and higher quality products.
The first step to creating a successful VMI program is to choose the best partner for the task. Next, select a vendor you trust to deliver on their promises with a proven track record in the industry.
Once you have selected your vendor partner, work with them to develop a comprehensive plan for your VMI program. This plan should include:
- An in-depth description of products or services to be provided.
- A dedicated team for the success of the program.
- The responsibilities of each party involved.
- The process for monitoring and managing the inventory.
- The frequency of communication between the vendor and the customer
- The metrics used to measure success
By developing a far-reaching plan, you can ensure that your VMI program is successful. Work with your vendor partner to create a system that works best for your business and will result in the best possible outcomes.
VMI is a beneficial system for both vendors and customers. By partnering with a suitable vendor and developing a comprehensive plan, you can ensure that your VMI program is successful.
Processes And Systems For The Win
When efficiency and accuracy are more important than ever, VMI has become a popular solution for managing inventory. In addition to a more seamless customer experience, VMI has many benefits for businesses.
VMI can help businesses reduce costs, improve customer satisfaction, and streamline operations. When used correctly, VMI is a powerful tool that can help companies achieve their goals. In addition, it creates many opportunities for those who can streamline processes and develop systems that make it easy to implement VMI.
Products Supplied to Plastics Manufacturers
With recent emphasis on light weighting, plastics are a go-to for appliance, electronics, automotive and many other industries. Rotation molding, injection molding, thermo-forms all use multiple types of components. Ranging from compression limiters, inserts, and plastic thread forming screws, in many types of sizes and configurations. VMI is great tool to manage and simplify multiples SKUs.