SCP 4.0 Forecasting  •  Demand Planning  •  VMI

Sensible Supply Chain Solutions by JADA Management

Vendor Managed Inventory (VMI)

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VMI Vendor Managed Inventory


The purpose of Vendor Managed Inventory partnership programs is to electronically share information between members of the supply chain resulting in shorter lead times, reduced inventory, reduced obsolescence, and more efficient manufacturing. The up-stream member of the supply chain (the supplier) takes on more decision making for what to supply to the customer. The result is a more leveraged relationship for the supplier and improved service for the customer.

For more information, view our VMI Overview page or download the JMS Guide to VMI Success from our downloads page.


VMI presents excellent opportunities to establish lasting mutually-beneficial relationships between customers and suppliers, and paves the way for dramatically increasing sales and securing new clients. Having visibility over client inventory and future demand is a significant advantage in being able to provide superior customer service while lowering inventory costs.

Technical Challenges

There are two primary technical challenges to the success of any VMI relationship.

The first is that customers will send data in a format of their choice and over their preferred medium of communication. Depending on how many customers are in your VMI program, this can involve a mix of Excel, ASCII, EDI, XML, etc. formats over Email, FTP Servers, Web Portals and EDI Networks. Managing all this manually can take a great deal of time and opens up the process to human error.

The second challenge is what to do with the data. The type of information will differ from customer to customer. Some will send point-of-sale information leaving it up to you to produce a forecast, others will send firm demand along with a long-term forecast, some will send their production schedules, some will send P.O. information, some will not... it will vary.

Automatically Create Orders

SCP can save planners and customer service representatives from the daunting task of having to manually turn recommended replenishment quantities into real orders. Working with your I.T. department, SCP can be configured to automatically enter orders into your order entry system through standard or custom screens.

Using SCP To Automate VMI Relationships

With SCP's built-in integration functionality, automating Vendor Managed Inventory communication between you and your customers is simplified. SCP is able to retrieve, import, process, and perform error checks against incoming data. It is also capable of communicating data and reports back to clients who are anxious to know how much inventory is being held at their suppliers and what shipments they can expect. Having a full-blown demand planning engine is a huge advantage in planning accuracy, and SCP's wide array of reports provide clear feedback to all parties involved.