Vendor-Managed Inventory
Vendor-Managed Inventory is an arrangement in which the supplier monitors agreed stock information and manages replenishment within defined rules.
What this term means in maintenance
Vendor-Managed Inventory is an arrangement in which the supplier monitors agreed stock information and manages replenishment within defined rules.
How VMI works
The supplier may review:
- Current stock
- Consumption
- Minimum level
- Forecast demand
- Open orders
- Lead time
- Agreed service targets
Practical example
A filter supplier reviews plant consumption and replenishes stock before the balance reaches the agreed minimum.
Customer controls
The plant should retain approval of item scope, maximum levels, pricing, technical specifications, and access.
Benefits
VMI can reduce purchasing effort and improve availability for suitable items.
Common mistake
Allowing the vendor to increase inventory without agreed maximums and demand review can create excess stock.
Related concepts
Related maintenance terms
Keep exploring connected CMMS, reliability, and maintenance planning terms.
Consignment Inventory
Consignment inventory is stock held at the customer's location but owned by the supplier until it is used or otherwise consumed under the agreement.
Reorder Quantity
Reorder quantity is the number of spare parts or units ordered when inventory replenishment is triggered.
Spare Parts Service Level
Spare parts service level measures how reliably maintenance inventory can meet valid parts demand when required.
Vendor-Managed Inventory FAQs
- What does VMI stand for?
VMI stands for Vendor-Managed Inventory.
- What does the vendor manage?
Agreed replenishment using stock, demand, lead time, minimum, maximum, and service information.
- Does the customer lose control?
No. The customer should retain technical, pricing, access, scope, and maximum-level controls.