Is Vendor-Managed Inventory Right for You?

 

Is Vendor-Managed Inventory Right for You?

What is Vendor-Managed Inventory (VMI) anyway? Simply put, it’s when a manufacturer allows its supplier (a distributor like Hodell-Natco, for example) to manage their inventory. The decision to change to a VMI system is a strategic one that creates close partnerships between manufacturers and their distributors. A VMI system will streamline and stabilize an entire supply chain. The burden of purchasing and stocking items shifts away from the manufacturer and onto the supplier. Thus, the manufacturer can focus on their core manufacturing business and provide the best possible experience to their customers.

Is Vendor-Managed Inventory Right for You?

In addition, a manufacturer who partners with Hodell-Natco on a fastener VMI system can expect a few key benefits:

  • No stock outs. When a distributor like Hodell-Natco analyzes your fastener usage patterns, carefully monitors fluctuations, and adjusts for seasonality, your manufacturing business runs much more smoothly due to accurate forecasting. Production will never stop because you don’t have the inventory you need. Inventory turnover ratios improve!
  • Cost savings. Manufacturers won’t need to stock as much inventory to ensure order fulfillment. A Hodell-Natco VMI Specialist can frequently deliver and stock batches of inventory in smaller quantities which reduces costs, lowers inventory risk and frees up valuable floor space.
  • Direct reduction in labor. Outsourcing inventory management gives the immediate and substantial impact of reduced labor costs. No materials handling, no receiving transactions, no time spent sourcing items or scheduling deliveries, and no time wasted looking for parts. Hodell-Natco efficiently handles all of this to directly add to your bottom line.