Overview

The sales via vendor-managed inventory (VMI sales) includes the process flow related to outsourcing inventory management functions from customer to the vendor (the considering company).

The vendor solely defines and fills up the customer's warehouse with its own goods. The customer, in turn, consumes these goods for its own needs, most often for manufacturing.

In rare cases, depending on the terms of a VMI sales contract with the customer, the goods may be sold to a third party. In this case, this scenario is a type of the O2C Consignment sales scenario.

In the VMI sales scenario, the company regularly tracks VMI, material consumption, and replenishment initiation. This scenario implementation requires tight integration with the customer's information systems as well as regular and consistent information exchange.