Tuesday, April 19, 2011

Vendor managed inventory

Vendor-managed inventory- implement eresource ERP

Vendor-managed inventory (VMI) is a process where the manufacturer generates orders for the distributor based on demand information sent by the distributor using Enterprise Resource Planning (ERP) system . During this process, the manufacturer is guided by mutually agreed objectives for inventory levels, fill rates and transaction costs.

VMI is a planning and management system that is not directly tied to inventory ownership. Under VMI instead of the distributor monitoring sales and inventory for the purpose of triggering replenishment orders, the vendor assumes responsibility for these activities.

In the past, many manufacturers operated vendor-stocking programmes where a representative visited a distributor a few times a month and restocked their suppliers up to an agreed level. VMI replaces these visits with information gathered from cash registers and transmitted directly to a manufacturer's computer system via ERP. Now, manufacturers can monitor sales of their products and decide when to initiate the replenishing procedure.

To understand VMI, let us look at to business models:

The Conventional Business Model: When a distributor needs a product, they place an order against a manufacturer. The distributor is in total control of the timing and size of the order being placed. Under this model, the distributor maintains their inventory plan.

Vendor Managed Inventory Model: The manufacturer receives electronic data that informs it about the distributor's sales and stock levels. The manufacturer can view every item that the distributor stocks as well as the true point of sale data. The manufacturer is responsible for creating and maintaining the inventory plan. Under VMI, the manufacturer generates the order, not the distributor.


Eresource ERP is an Indigenous web-based ERP solution. Since its Inception, eresource is been providing enterprise solution and consultancy for clients within the Manufacturing, Pharmaceutical, Chemical and Logistics product industries in India. Market leaders now turn to eresource to help them to bridge the gap between strategy and execution to sustain a competitive advantage. Eresource products focus on Enterprise Resource Planning (ERP), which it helped to pioneer in the Internet arena. Eresource ERP is the first web-based Enterprise Resource Planning Software.

The eresource paradigm of web-based ERP recommends that companies must capitalize on the Internet infrastructure and cross enterprise boundaries to extend its processes to its value-chain partners. To execute eresource ERP only a simple browser is required; no client side installation. Eresource ERP can also be accessed from the Palm Device and also from a mobile device

For more information kindly visit: http://www.eresourceerp.com/Vendor-Managed-Inventory.html
OR Please Contact us at:
TMA House, 1st Floor,Road No 16, Plot No. 6,Wagle Industrial Estate,Thane (West) 400 604, Maharashtra, Tel: +91 22 25827692/+91 22 25828775, Web site: www.eresourceerp.com


  1. Thanks for sharing this information with us, I loved reading and learning from your posts.
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  2. You have raised such great points to think about.
    erp software solutions to all the domains available & handle most complex erp implementations. The implementation of ERP software system is done only after a very thorough study and evaluation of each and every business process.


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