What is Vendor Managed Inventory (VMI) in Retail? Explained

Vendor Managed Inventory (VMI) in the retail industry is a collaborative approach where the supplier or vendor takes responsibility for managing and replenishing a retailer's inventory. In VMI, the vendor monitors inventory levels, restocks products, and ensures that the retailer has an optimal stock of goods. This method helps streamline the supply chain, reduce stockouts, and enhance efficiency. By allowing vendors to have real-time visibility into inventory levels, VMI enables better coordination between suppliers and retailers, improving overall inventory management and ensuring that products are available to meet consumer demand.