Vendor Managed Inventory (VMI) is a replenishment model in which a supplier is responsible for fulfillment against orders issued on behalf of the manufacturer and based on demand information. During this process, all parties are guided by mutually agreed upon objectives for inventory levels, fill rates and transaction costs.

Typical VMI fulfillment process:

1. The manufacturer provides daily production material needs via EDI to Ryder.
2. Ryder pulls the requested material from inventory and coordinates delivery to the manufacturing facility.
3. Ryder sends transaction details and replenishment needs via EDI to the vendor(s) on a daily basis.
4. The vendors analyze the information provided by Ryder to fulfill purchase orders and maintain set inventory levels.

Benefits

• Contributes to supply chain optimization
• Improves visibility across the supply chain pipeline
• Improves production planning and forecasting
• Reduces inventory levels and safety stock
• Reduces fulfillment costs and lead times
• Improves in-stock availability and inventory turns
• Increases replenishment accuracy and decreases potential returns. Enables inventory management at retailer level
• Improves service level agreements by supplying the right product at the right time