In Vendor Managed Inventory systems, who maintains the buying organization's inventory levels?

In Vendor Managed Inventory (VMI) systems, the supplier is responsible for maintaining the buying organization's inventory levels. This approach shifts the responsibility of inventory management from the buyer to the supplier, who utilizes data regarding the buyer’s inventory levels, sales patterns, and demand forecasts to optimize stock levels.

The supplier actively monitors inventory and determines when to replenish stock, ensuring that the buyer has the right amount of products on hand without overstocking or stockouts. This system fosters a closer relationship between the supplier and buyer, as it requires trust and effective communication.

Through VMI, suppliers can more accurately respond to demand fluctuations and production schedules, enhancing overall efficiency in the supply chain. This arrangement allows the buyer to focus on their core operations while benefiting from potentially reduced costs and improved service levels. The other roles listed, such as the buyer, warehouse manager, and shipping department, typically have more traditional responsibilities related to their specific functions within the organization, rather than overseeing inventory decisions made by the supplier.