What does vmi mean

vmi means cooperative strategy model.

The so-called VMI (Vendor Managed Inventory) aims at obtaining the lowest cost for both users and suppliers. The supplier manages the inventory under an agreed agreement, and constantly monitors the implementation of the agreement and amends the content of the agreement, so that

A collaborative strategy where inventory management is continuously improved.

?This inventory management strategy breaks the traditional siled inventory management model.

It embodies the integrated management idea of ??the supply chain and adapts to the requirements of market changes. It is a new and representative inventory management idea.

VMI plays a very important role in the distribution chain, so it is valued by more and more people.

For Vendor Managed Inventory (VMI), because there are minimum and maximum inventory points, on-time delivery can be measured by relative inventory levels.

For example, if the inventory is zero, the risk is very high; if the inventory is lower than the lowest point, the risk is quite high; if the inventory is higher than the highest point, the risk of out of stock is small but the risk of expired inventory is increased.

In this way, the supplier's delivery performance can be measured by counting the various situations mentioned above.

Based on future material demand and supplier supply plans, the future trend of inventory points can also be predicted to determine specific inventory indicators at specific times.

The VMI management model is developed from QR (Quick Response) and ECR (Efficient Customer Response). Its core idea is that suppliers can share the current inventory and actual consumption of user enterprises through ***

Data, based on actual consumption models, consumption trends and replenishment strategies for replenishment based on actual basis.

As a result, both parties to the transaction have changed the traditional independent forecasting model, trying their best to reduce the waste of business flow, logistics and information flow caused by the uncertainty of independent forecasting, and reducing the total cost of the supply chain.