VMI (Vendor Managed Inventory)
Category: Inventory
Also searched as: Vendor managed inventory
Definition (plain English)
Vendor Managed Inventory is an arrangement where the supplier helps plan or trigger replenishment based on agreed stock, sales, and service-level data.
Why it matters commercially
VMI can reduce stockouts and buyer admin, but it shifts planning influence to the supplier and requires clean data, clear liability, and agreed inventory targets.
Example
A distributor allowed VMI only after setting min/max stock, shelf-life rules, forecast sharing, order approval rights, and responsibility for obsolete stock.
Common mistake
Calling a supplier forecast a VMI program without agreeing data access, reorder authority, service targets, expiry rules, and who owns excess inventory.
Use this in CommerceKit
Supplier Quotes
Use tool →MOQ & Shelf Life
Use tool →