VMI - Vendor Managed Inventory.

Integrating processes - expanding the supply chain

The Internet offers new ways of business transactions. Courses of business emerge beyond company borders. Globalisation within all markets boosts several kinds of developments and changes the landscape of business world-wide. The results of this are completely new forms of process integration between manufacturers and suppliers. Therefore we need to design efficient logistical networks and establish an optimal process integration in terms of a supply chain. Hence, several concepts (e.g. "VMI - Vendor Managed Inventory") are additional components in a network of dynamic business relations that can be managed in real-time using suitable information systems. Thus VMI is one of the fundamental components in a broad supply chain environment.

Advantages - for the buyer

	Improvement of fill-rates from the manufacturer up to the end-customer
	Reduction in planning and order management costs
	Improvement of service; the right product at the right time

Everyday analogy

Imagine you have your raw material or product permanently available and you need not to worry replenishment. This is no illusion but reality. Just take an example from your everyday life.

You have a need for water and satisfy demand by turning on the tap. The public services - your supplier - replenish your water supply you always have enough at hand. The public services own and manage to buy individual units of water and ensure that it will always be available in cases you need it.