Manual purchasing is a drag, especially repetitive manual purchasing. Not only is it tedious, but it devours valuable time you could spend on other more pressing matters. Vendor managed inventory (VMI) programs can streamline the tedious purchasing process for small class-c parts like fasteners by automatically replenishing stock so you never have to place a new order anytime inventory runs low. This has the added benefit of saving time and money on purchasing orders that can be invested elsewhere in the business.
Time spent now will save hours later
To reap the time-saving benefits of VMI, first, you’ll need to establish a solid plan with a qualified VMI supplier. Reviewing your operations and inventory usage with your supplier will give them a good idea of your needs and expectations, creating visibility that will make it easier for the supplier to deliver shipments of parts in a timely manner that will best benefit your operation. With VMI, the supplier manages inventory for the many different parts you need, which puts less strain on your own storage facilities and which also makes it easy to quickly order and receive components.
By monitoring your on-site inventory, the supplier can determine replenishment, and handle distribution giving you less to worry about. You will still need to check in with the supplier now and then to discuss any changes to operations or other needs you may have, but it won’t involve the time-consuming paperwork that typically accompanies purchasing orders.
No more panic when supplies dwindle
When you establish a VMI program, you won’t have to worry about running out of parts. This means no scrambling to place rush orders, which can translate to additional costs, paperwork, and time wasted on the phone with suppliers to learn when you’ll get needed items. The visibility established when you set up the VMI program means the supplier will be able to produce and replenish stock on the storage side, so the components will be ready to ship when you need them. Say the demand for your finished product suddenly jumps up and you find your OEM in need of more parts than you typically order. You are less likely to encounter a stock-out with a VMI, as the supplier will be able to recognize the increased order size right away. At this point, you may need to review your automated inventory delivery, depending on if the demand increase is temporary or permanent.
Save money that you can invest elsewhere
If you’re placing purchasing orders regularly, you may be wasting precious resources. The cost of a purchase order can range from double to triple digits. This expense encompasses a variety of factors, including salaries, paper and communications costs, overhead costs like benefits and facilities and the actual cost of parts being ordered. A VMI program that can automate the ordering process, reducing this cost, freeing up budget dollars and creating a more cost efficient manufacturing supply chain.