Advantages of VMI (from the recipient’s and supplier’s perspectives)
Advantages for the recipient (manufacturing or trading company):
- easy purchase planning
- fast component purchase order lead time
- stock reduction (reduction of warehousing costs)
- minimisation of shortages of manufacturing resources
- flexibility of action and susceptibility to changes in manufacturing plans
- safety of the solution
Advantages for the supplier:
- lower freight costs thanks to shipping larger amounts of goods
- control over the stock until it leaves the warehouse
- ensuring higher flexibility of component delivery lead times
- minimising forecasting errors
- mutual pricing agreements between the recipient and the supplier – both parties obtain
- considerable room for manoeuvre during negotiations