VMI moves the stock to where it is consumed and the replenishment decision to the supplier — so the buyer stops carrying a warehouse and starts carrying a forecast.
| VMI model | Min/max bins at the point of use, replenished on a fixed cycle or on consumption data |
|---|---|
| Consignment | Stock owned by us until issued; invoiced on consumption |
| Kitting | Multi-part sets per assembly, picked, labelled and sealed |
| Replenishment cycle | Weekly or bi-weekly, depending on consumption rate |
| Visibility | Stock report per bin, consumption history and forecast variance |
| Typical scope | Bearings, seals, lubricants and the fasteners that go with them |
| Exit | Consignment stock returned or bought out at the agreed price — defined in the agreement |
| Model | Who owns the stock | What it solves | What it costs |
|---|---|---|---|
| VMI (min/max bins) | Buyer | Stockouts and emergency orders | A small handling premium or a service fee |
| Consignment | Supplier until issued | Working capital tied up in slow-moving parts | Price per piece, no stock on the buyer's books |
| Kitting | Buyer | Line-side picking errors and time | Per-kit picking and packing charge |
VMI pays where the cost of a stockout is much higher than the cost of the stock: a production line waiting for a 6205, a maintenance team with a machine down, a service van without the right seal. It pays less where consumption is unpredictable or where the parts are expensive and slow-moving — there, consignment or a simple safety stock is the better instrument.
| Item | Included | Done by | Frequency |
|---|---|---|---|
| Bin supply and labelling | Yes | Us | At setup |
| Min/max setting | Yes | Joint, based on 8-week consumption | At setup, reviewed quarterly |
| Physical counting | Yes | Us | Each replenishment visit |
| Replenishment order | Yes | Us, from the count | Weekly / bi-weekly |
| Consumption report | Yes | Us | Monthly |
| Obsolescence review | Yes | Joint | Annually |
| Emergency call-off | Yes | Us | Within 24 h |
VMI works better when one supplier covers the whole kit.
Read →High-consumption, low-value parts at the line.
Read →The cycle time that sets a sensible min/max.
Read →Site, part list, consumption and current stock.
Read →Either a small handling premium on the unit price or a fixed service fee per bin per month, depending on the volume and the visit frequency. It is quoted against a defined part list and site, not as a percentage.
We do, until it is issued from the bin. It is invoiced on consumption, which means it does not sit on the buyer's balance sheet as inventory.
Consignment stock is returned or bought out at the agreed price, stated in the agreement before it starts. Bins and labels are removed at no charge.
Yes — seals, lubricants and the fasteners that are consumed with them. Consolidating the whole kit at one supplier is usually the point of the exercise.
From eight weeks of consumption history, the lead time and the criticality of the part. It is reviewed quarterly, because a min/max that is never adjusted becomes either a stockout or dead stock.
Send the drawing, the model list or the failure report. We reply with a scope, a price and a lead time within 30 minutes on working days.