This is Why Walmart and Amazon Use Vendor Managed Inventory (VMI)

In the traditional supply chain model, distributors and retailers work together to balance inventory and place orders when stock levels are running low. However, Vendor Managed Inventory (VMI) flips this on its head. With VMI, you, the supplier, take full responsibility for optimizing and replenishing the inventory held by your distributors or sellers. This proactive approach has clear, noticeable benefits, which is why major retailers like Walmart and Amazon use VMI.

How Vendor Managed Inventory Works

VMI relies on the sharing of inventory data between suppliers and retailers. Through VMI software, suppliers can:

• Monitor inventory levels across multiple retailers.
• Set minimum and maximum stock levels to avoid overstock and stockouts.
• Use product sale information to inform data-driven decisions that can impact all parts of the business including R&D.

While VMI is a best practice for modern supply chains, it does come with initial challenges. These hurdles may seem daunting at first, but overcoming them can lead to long-term benefits and a future-proof supply chain. Let’s break down the biggest challenge: investing in the right technology.

The Importance of Technology in VMI

Before implementing VMI, you’ll need to invest in tools that provide the insights and automation required for efficient inventory management. This is where Pantry AI comes in. Unlike clunky, traditional systems, Pantry AI is designed to be intuitive and user-friendly, with a near-zero learning curve. It’s the modern solution to make VMI work for you.

Here’s what to look for in VMI software:

• Seamless integration with your order fulfillment or selling system.
• Demand forecasting to predict future inventory needs.
• Real-time alerts when stock levels are running low.
• Comprehensive tracking of all relevant product data.

Pantry AI delivers on all these fronts, providing you with the tools you need to streamline inventory management without the headaches.

Real-World Examples: How the Best in the Business Use VMI

Leading retailers, like Amazon, rely on VMI to manage their massive supply chains. For Amazon, maintaining control over millions of items would be nearly impossible without VMI. Here’s how they do it:

• Amazon gives third-party vendors access to inventory data, enabling them to determine when to replenish stock.
• Amazon’s suite of vendor tools allow suppliers to identify underperforming products and replace them with more popular items, ensuring optimal stock levels.

Amazon’s success with VMI highlights the importance of using the right tools and technology to optimize inventory management—and that’s exactly what Pantry AI offers to businesses of all sizes who are growing in retail.

Why Pantry AI is Your Go-To VMI Solution

Switching to a VMI model can transform your supply chain, but the key to success lies in the tools you use. Pantry AI simplifies the process, giving you the insights and automation needed to make smarter, faster decisions. Pantry AI helps you:

• Reduce costs by avoiding overstock and stockouts.
• Improve cash flow through smarter replenishment strategies.
• Meet customer demand consistently and efficiently.

Ready to take control of your supply chain? Contact Pantry AI today to learn how our platform can revolutionize your inventory management.