Modern Supply Chain Management (SCM) concepts address important root causes of current limitations in logistics networks. Efficient built-to-order strategies and short time to delivery goals require fast and flexible supply networks.

In this context inter-company visibility and transparency, a prerequisite of high-level integration between customer and supplier, plays a central role. The Vendor-Managed-Inventory (VMI) concept represents one major process type in the family of pull-based systems.

The VMI recommendation, based on ODETTE’s Supply Chain Monitoring (SCMo) recommendation, describes the basic business process model and the corresponding functionality, responsibilities and implementation steps for the vendor managed inventory concept.

It sets a standard for the overall VMI concept and the corresponding IT applications. The medium term goal is to enable European-wide, standardised use of VMI applications from different software providers and marketplaces.

VMI basically checks continuously if the actual or planned inventory levels of the VMI inventory are too high or too low in relation to the demand of the next days/weeks. The supplier will get early and clear signals whether to speed up or to slow down production.
This fulfilment methodology will bring a great benefit for both customers and suppliers by reducing non-value adding and administration costs, making supplies more secure and efficient and reducing inventory and transport costs.

To download the recommendation click here.