One of the most fundamental parts of successful business operations, supply chain management, is a challenging exercise in logistics management. Determining the proper inventory levels to hold is a significant challenge all on its own. Add in the need to correctly forecast surges and dips in demand for particular products, and these essential tasks can become time-consuming and costly. Even with extensive planning and hard work, you may encounter frustrations such as seasonal supply bottlenecks or stock-out incidents. The result is a less-efficient approach, often leading to total supply chain costs that balloon to unreasonable or unsustainable levels.
You might be wondering if you can develop a supply chain whose management doesn’t require such a significant and ongoing investment, and if there is a better way to acquire the crucial plastic components necessary to maintain smooth operations throughout your business. With Reliant Plastics’ vendor-managed inventory services, or VMI, the answer to both questions is a resounding yes.
Take a moment to learn how we help you reduce supply chain costs by working together to keep your business as agile as possible within its marketplace.
What Is Vendor-Managed Inventory?
First, we must consider the traditional inventory and supply chain management method. This process primarily involves observing your stock levels and placing orders for more units as needed. Though effective if well managed, this approach often leads to supply shortages or hiccups that drive up your supply chain management costs.
At the heart of VMI is a technology-based solution that facilitates frictionless communication between businesses such as yours and critical vendors such as Reliant Plastics. In contrast, vendor-managed inventory is a framework that redefines the relationship between supplier and buyer. This approach eliminates many of the most common headaches while introducing savings and enhanced agility for all involved parties.
What if you could remove the need to maintain large quantities of back stock and eliminate that cost? With VMI, you can. Instead of facing constant demands on your time for inventory management, forecasting, and ordering, VMI introduces an element of automation into the mix. Let’s look at how.
In VMI, your vendor creates an electronic interface with your existing ERP or MRP systems. This connection facilitates the easy exchange of data regarding stock levels and other supply chain statistics. We automatically receive information about product demand, stock levels, and more. We then build your orders ourselves for automatic fulfillment wherever you need the product. Why risk keeping so much inventory when you can receive it on demand and on time instead?
This process can reshape your work, from manufacturing plants to warehousing for finished products. You’ll unlock many benefits by trusting our team to handle your inventory management practices and keep your business well stocked. Read on to learn more about those benefits.
Accessing the Key Benefits of VMI
Enjoy saving money on storage costs by reducing the need to maintain a large safety stock. Switching to VMI rapidly reduces the administrative overhead necessary for proper inventory management. By offloading most of that process to your molding company, your business can redirect essential resources toward other purposes. At the same time, you can reduce inventory on hand, transitioning to a smarter supply chain strategy based on actual demand.
Our careful data-driven oversight of your inventory ensures accurate orders, prompt deliveries, and a supply chain that is always in motion. Untimely product shortages during periods of surging demand have become a thing of the past, so you may even see increased sales due to better product availability. We take all the necessary steps to prevent stock-out situations, virtually eliminating this problem.
Our agile process ensures your business always has access to what it needs in the right location, with products on the way to your door with consistency. Improved demand visibility on both sides of the equation translates to a collaborative supply chain strategy to position your business for new growth.
Why Controlling Your Supply Chain Costs Matters So Much
Understanding how to reduce supply chain costs is critical for several reasons. Without reasonable control over this process, responding to the demands of the marketplace is very challenging. Poor control over charges may also lead to moments of crisis when potential supply chain disruptions occur. As we’ve seen over the last several years, forecasting future demand and building resiliency into the chain can be a make-or-break process. When there is an opportunity to capitalize on sudden consumer demand, the costs associated with obtaining the necessary inventory should not be a substantial drain on profitability.
Reducing chain uncertainty and controlling costs through methods such as VMI makes your business more agile and effective. A less-costly supply chain helps companies weather storms in the marketplace. By reducing your spending here, you can avoid less-desirable cost-cutting measures such as layoffs and downsizing. Robust insights into demand visibility, such as those possible through VMI integration, are essential to a healthy business.
Increase the Agility of Your Business With Reliant Plastics
Across the board, our customers who choose to transition to a VMI supply chain model see improvements at every level. With fewer administrative costs and mishaps due to mistakes or miscommunications, the entire chain flows more smoothly from end to end. When you can easily maintain appropriate stock levels and trust in the timely arrival of plastic injection molded products, your business may refocus on what matters most: providing excellent products and service to consumers.
Learn more about the benefits of Reliant’s VMI services and how to leverage them for your business when you get a quote today.
