Efficient warehouse and inventory management is important for more than just getting the right merchandise to the right place at the right time. It's also key to cutting process costs.
Vendor Managed Inventory (VMI) is a logistics tool for improving performance along the supply chain. It provides STI Group with access to the customer's warehouse inventory and demand levels. We then assume responsibility for the inventory levels of our products at our individual customers' warehouses – a service that requires smooth processes since some customers have over 1,000 articles in stock.
Depending on the customer's desires, STI Group can undertake continuous replenishment or demand-dictate replenishment. The latter requires the customer to provide us with consumption data (such as through sales data reports). Rolling order forecasts are used to schedule and execute production of packaging even without explicit orders from the customer.
The underlying commercial terms for this form of cooperation are established through a Service Level Agreement.
- Quick reaction to fluctuations in demand
- Higher level of service, reduction in out-of-stock rates at the retailer
- Higher responsibility and more freedom for the supplier during scheduling
- Optimisation of logistics costs
- More affordable batch sizes
- Lower inventory levels at the retail level
- Increased sell-through and reduced return volumes through perfectly sized reordering