This is a means of optimising the supply chain, whereby the supplier becomes responsible for maintaining the customers inventory levels. This means the supplier needs access to the customers stock levels and the use of vendor managed inventory software allows this. This means the manufacturer generates the order, not the customer.
For example, the IN4MA is used to monitor the level of chemical within a storage tank on a customer’s site. This information is then available to the supplier via the data acquisition software, normally by using the internet. An alarm is sent when the product level goes below a ‘re-order’ point, and sent directly to the relevant department by fax or email, who are then able to respond and send a tanker as required.
VMI improves customer service, reducing the need for the customer to monitor the level and then place an order. It also reduces errors in ordering and ensures there are no part loads or returned tankers and therefore reducing logistic and transportation costs.