How Vendor managed inventory will increase efficiency in your business
Every single business is going to want to be more efficient. Having a business with the most efficiency will help you get more done in less time, improve all of your productivity, and ensure that your business is making the most of every single opportunity that comes to it. While your business might be using several efficiency hacks to get a leg up on the competition, there’s probably one you are not using: vendor managed inventory.
Vendor managed inventory takes most of the logistics of inventory management off of your plate. If you spend a lot of time thinking about where you have inventory, where you can get more of it, and how long replacing sold out inventory will take… well, that’s time thinking that you could have used to fix your business. Thankfully, vendor managed inventory is something that you can use to answer these questions and also have your inventory managed by the very people who supply it.
Here are some of the ways that a VMI system will help skyrocket your business’s efficiency.
You Will Be Acting And Not Reacting
Whenever you run out of stock for something in your business, you will find yourself doing some level of reacting. You’ll be updating the website to reflect this change, making sure that no one has bought any out of stock orders, and also trying to buy more inventory to get yourself back on track. This can cost a lot of time and money, and instead of reacting whenever your stock gets low, you can instead focus on acting with a VMI system.
A VMI system is when the suppliers manage your inventory, and all you need to do is set up a reordering threshold. Then when your inventory levels reach their reorder points, then vendors will automatically replenish your stock without you having to lift a finger. By having your vendor on your side to reduce stockouts and panic buys, you can focus on the rest of your business and know that you will never truly run out of stock.
VMI Gives You Control Over Demand
How much money are you paying just to have your inventory that you should be selling just sit there and gather dust? How much money are you losing because a stockout has occurred and you need to get your inventory back before you can sell again? With a VMI vendor you can focus on having all the stock you need and you won’t be spending too much or selling too little due to fluctuations in your inventory.
You can reduce a lot of overhead cost just by working with VMI systems, and because they are taking data and analyzing your customer behavior in your store, you can be sure that they can meet and predict your customer demands, probably before you can. Plus, they are also constantly attempting to sell their product and keep their goods on your shelves, so they’ve got an interest in not letting you stock out.
You Can Focus On One Vendor
Instead of spending lots of time communicating with dozens of retailers or distributors to ensure that you have the inventory you need; you can work with a VMI system and have all your inventory in one place. You will find that you have a lowered cost and won’t need to spend as much administrative time focusing on communication with vendors.
Instead, you can focus on working through your VMI system and also on other aspects of your business because your free time is going to be expanded. Most business owners complain that they don’t have enough time to take on more in their business, but with a VMI helping you out, you might find that those complaints don’t work as well as they did before.
Focus On Bringing In A VMI And Seeing What They Can Do For You
While it might seem like bringing in a third party for your business might be more of a hassle than it is worth, you need to ensure that you give VMI a try. Working with one vendor and giving them what they need to succeed with your business is going to streamline a lot of processes and ensure that you have increased efficiency across the entire board.
There are a lot more benefits that a VMI can bring to the efficiency level of your business, so don’t be afraid to reach out and see what they can do for you!