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What is VMI and How Does it Increase Sales?

Vendor Managed Inventory (VMI) and its evolutionary cousin, Collaborative Planning Forecasting and Replenishment (CPFR) are fancy terms used to describe trading partners who work together on an inventory management program with goals that are closely aligned.

They offer options to companies such as offering multiple routes to market, using a variety of demand signals, and letting any trading partner place orders. It also aims to reduce supply chain costs through better integration and cooperation between partners.

VMI includes strategy and planning, demand and supply management, execution, and analysis. This means that partners collaborate and follow a process that includes developing business plans, including goals; forecasting for future orders; order fulfillment; and, finally, analyzing how well it worked.

The bottom line for this means that VMI gives your organization a competitive advantage. Specifically, that joint business plans with your partners are respected which leads to minimizing costs, maximizing efficiency, and, ultimately, to increasing sales and revenues.

Packaging and VMI

This same approach works well for clients of Pinnacle Packaging. When you and your partners agree on objectives such as inventory turns, fill rates, in-stock percentages, and transaction costs, it helps to keep your inventory levels where you want them, including your packaging supplies, whether they are branded or not.

Whether you use tape, foam, tubes, sheets, or corrugated boxes, following the VMI approach means we work as partners to ensure that replenishment orders are made at the right time.

Doing this ensures you have all the supplies you need, when you need them, in quantities that are neither too much nor too little. It can also reward you with better pricing, helping to improve your profitability.

When packaging supplies are consistently on hand, there is no disruption to your supply chain, and your customers are able to get their orders shipped on time. No one wants to hear that their orders are delayed because you don’t have the boxes, tape, or other shipping supplies you require.

Improved Sales

Pinnacle Packaging helps to improve your sales through quality, reliability, and consistency. When you know you can depend on packaging that will perform beyond your expectations and won’t let you or your customers down, that is one crucial component that influences customer loyalty.

Likewise, when your package arrives in perfect condition, with the items inside well protected, and is attractively branded, your customers know you care about every step of the process.

Whether they actively think about it or not, the way your products arrive, and the products you use to send them, makes an important first impression. If they think their items were just tossed in a box with no care, they will notice. On the other hand, items that were specifically placed, protected, and look appealing to the eye, gives your customer their first wow. The second one is when they get their hands on your product.

The whole process matters, and we would love to be your packaging partner. For more information, contact Nicole DeJoris at 773-235-6060.