One of the most difficult things to manage in terms of an inventory based business is how much demand you have for your inventory and your actual inventory level that is kept readily available. Even if you have been in the business for several years, it is still difficult to really determine the right level of inventory needed to meet your specific goals as well as what your customers will actually buy.

This is where inventory management comes into play. While determining the right inventory level may be something a lot of businesses want to keep in-house, trying to do it on your own can be tricky. At some point, you will likely end up with too much inventory that you can’t move. Worse, you may not have enough to fulfill customer orders and you will have to rush order from suppliers, deal with complaints due to delays and end up spending more money.

Either way, this creates a problem for either you or your customers. It also impacts your bottom line and then you really have an issue on your hands. Vendor inventory management can help to change all of that for your business so you actually can shorten the gap of guess-working how much inventory you should have. One solution that can help in this process is Vendor Managed Inventory (VMI), which works in a more cohesive and collaborative way so that everything is taken into account and your inventory planning can be more reflective of actual needs.

By including all of the stakeholders in the process, you can really get a full picture of what is actually needed and you can work to make sure that your planning reflects everything that impacts your inventory needs. Though “giving away” some control over the amount and timing of your deliveries can be a cause for some concern, consider the trade-off your organization will receive in the shared responsibility and liability of inventory storage, costs, etc.


It also ensures that the needs and concerns of each stakeholder are made visible and given importance, leading to better relationships. The ultimate goal is to optimize the balance between your inventory and the market need. While it is not always possible to do and it is usually never perfect, you can get closer when you are utilizing a solution such as VMI. Learn more about VMI and how it can help you to connect all the stakeholders in your supply chain.

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