Vendor Managed Inventory (VMI)
Vendor managed inventory (VMI) is a supply chain agreement between vendors (suppliers) and buyers where the vendor manages and maintains their inventory while it’s in the possession of a buyer, or in this case, while the goods are held in our VMI warehouse close to the Port of Felixstowe.
How VMI Works
- The vendor and buyer agree on the necessary requirements for their VMI relationship and these will normally include performance, cost and the turnover rate for the inventory
- The vendor ships inventory to the UK and Bridge Shipping collect it from the port and moves it into the VMI warehouse, where it is held under customs control without any duty or VAT being paid.
- Bridge Shipping liaise with the end user by agreed communication methods to monitor the demand for the goods - this can be via access to the buyers electronic systems.
- Goods are cleared from customs control and delivered to the buyer to fulfil their demand.
- The vendor makes reordering and replenishment calculations based on inventory levels, demand forecasting and lead time.
Visibility of parts within a VMI program is essential and this is where VMITrac comes into its own. VMITrac is a bespoke online web portal where both the vendor and the buyer can view a complete audit trail of the goods moving into and out of the VMI warehouse. It features various reports such as current inventory holdings at part level, stock at a glance, parts in transit to the warehouse and many more.
