DUAL BENEFITS:

• Data entry errors are reduced due to computer to computer communications. Speed of the processing is also improved.
• Both parties are interested in giving better service to the end customer. Having the correct item in stock when the end customer needs it, benefits all parties involved.
• A true partnership is formed between the Manufacturer and the Distributor. They work closer together and strengthen their ties.
• Stabilize the timing of Purchase Orders – PO’s are now generated on a predefined basis.

  DISTRIBUTORS BENEFITS:

  • The goal is to have an improvement in Fill Rates from the manufacturer and to the end customer. Also, a decrease in stockouts and a decrease in inventory levels.
  • Planning and ordering cost will decrease due to the responsibility being shifted to the Manufacturer.
  • The overall service level is improved by having the right product at the right time.
  • The manufacturer is more focused than ever in providing great service.

    MANUFACTURERS BENEFITS:

    • Visibility to the Distributors Point of Sale data makes forecasting easier.
    • Promotions can be more easily incorporated into the inventory plan.
    • A reduction in Distributor ordering errors (which in the past would probably lead to a return)
    • Visibility to Stock Levels helps to identify priorities (replenishing for stock or a stockout?). Before VMI, a manufacturer has no visibility to the quantity and the products that are ordered. With VMI, the manufacturer can see the potential need for an item before the item is ordered.