Vendor Managed Inventory
Vendor Managed Inventory (VMI) is a supply chain management methodology where the supplier (vendor) takes responsibility for maintaining inventory levels at the customer's location. The vendor monitors stock, forecasts demand, and initiates replenishment orders, shifting inventory management tasks from the buyer to the supplier. This approach aims to reduce stockouts, minimize inventory costs, and improve supply chain efficiency through collaborative planning.
Developers should learn VMI when working on supply chain management systems, e-commerce platforms, or enterprise resource planning (ERP) software, as it's crucial for automating inventory processes and integrating with vendor systems. It's particularly valuable in retail, manufacturing, and distribution industries to optimize inventory turnover and reduce manual oversight. Understanding VMI helps in designing systems that support real-time data sharing, demand forecasting, and automated replenishment workflows.