Supply Chain Management

What does vendor managed inventory mean for your plant?

One reader wonders which parts should be considered for vendor managed inventory.

Q. What does vendor managed inventory mean in maintenance, and are there guidelines to help determine which parts should be considered?

A. With vendor managed inventories (VMI), an agreement basically is reached between a vendor and a manufacturer to ensure that an agreed-upon level of specified parts is maintained by the service provider. Either an agreed-upon frequency of replenishment is determined or information is furnished, through electronic data interchange (EDI), to alert the vendor when inventory levels need replenishment.

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