Why (retail) suppliers should embrace their customers’ Vendor Managed Inventory (VMI) process with EDI integration

Lots of retail suppliers across various industries are asked to use Vendor Managed Inventory (VMI)*. This article on VMI and Electronic Data Interchange (EDI) breaks down why buyers want it.

But as a supplier, you might wonder why you should go along with it. Don't worry – embracing VMI powered by Electronic Data Interchange (EDI) has benefits for you too. It makes forecasting easier, puts you in charge of stock management, and saves you money. Additionally, VMI strengthens your relationship with retailers, as it demonstrates your commitment to their success, fostering long-term partnerships and mutual growth.

EDI-powered VMI enables you to build strong partnerships with your retail clients by taking charge of inventory management. By keeping a close eye on their inventory levels and sales data, you can swiftly adjust production schedules and delivery quantities. This means you'll always have products on the shelves when customers want them. This commitment not only improves customer satisfaction levels but also solidifies your reputation as an indispensable and reliable ally within the supply chain. The easier forecasting will lead to improved production efficiency and lower inventory holding costs. Being involved in multiple supply chains from start to finish gives you economies of scale, making your operations more efficient and giving you a competitive edge.

“Setting up the VMI process was crucial to becoming a supplier to our largest customer, so this step was of great importance to us. The impact of this transition is that we can work more efficiently: we have been able to outsource the management of the VMI flow to our distributor, which gives us more time for further optimization of our supply chain.”

Pieter Verspeek, No Fairytales

EDI-powered VMI simplifies the supply chain process by allowing each party to focus on their core competencies. The automated and centralized approach enables you to efficiently manage replenishment, release, and clearance of stock, resulting in significant time and cost savings. It also enhances your operational agility and reduces communication errors.

By leveraging regular inventory checks and monitoring market fluctuations, suppliers can effectively manage their stock levels, resulting in cost reductions. This proactive approach – automated by EDI - eliminates the need for excessive safety stock and minimizes purchase-related administrative expenses. With sufficient lead time to restock, you can meet demand without costly emergency rush orders. Plus, with VMI there are fewer risks associated with under- and overstocking, making your operations smoother and your inventory management more efficient.

Boboli, a bread specialties bakery and retail supplier recognizes the added value of EDI in their VMI processes: Boboli holds stock for customers and ships the goods to them, with the stock remaining the property of Boboli until the customer sells the goods. At that time, the system automatically generates replenishment orders, resulting in seamless processing and invoicing. For both parties, the benefits of VMI are high product availability, fewer process steps and inventory reduction.

Take on the force of Vendor Managed Inventory (VMI) powered by EDI and unlock new opportunities for your business. By partnering with your customers and taking control of inventory management processes, you boost customer satisfaction, streamline operations, and save money. Don't let this opportunity pass you by – it's your chance to stand out in the supply chain and take your business to the next level. Start using VMI supported by EDI now and see the benefits of smart collaboration and innovation firsthand.