Vendor Managed Inventory programs, otherwise known as VMIs, are models that allow buyers to outsource both inventory management and inventory restock. Typically, the buyer themselves would monitor their item stock, determine how much new product needs to be bought, and place their new orders. This model comes with the risk of the buyer ordering too much or too little, or not ordering in a timely manner. This can often cause challenges in production and workflow, and typically results in uneconomical consequences. With a VMI, either the vendor or a third-party is responsible for consistently measuring inventory and restocking items when necessary.
How does a VMI system work for the lab supply industry?
A VMI can be useful and efficient in a laboratory setting. This system allows lab managers and workers to better focus on their work within the lab, which is often their true skillset and training experience, while allowing experienced vendors and third-parties to take care of the minutia of ordering and stocking materials. In many laboratory settings, certain materials can be constantly in use and in need of consistent monitoring and restock, while other items may rarely need to be restocked. Taking this monitoring and fulfillment burden off of laboratory employees and onto specialized VMI vendors benefits all parties. According to LabPro, many laboratories experience significant cost savings and more productive personnel when utilizing a VMI.
What are the advantages of a VMI system?
There are many advantages to implementing a VMI system. When using a model where the laboratory or manufacturing facility buys and manages supplies, it can often be uneconomical. Facilities run the risk of buying too little or too much, which can cause problems later on, in turn leading to more cost consequences. Also, these models often utilize laboratory and facility workers whose attention may be split between their main purpose at work, while attempting to keep track of supply and place orders efficiently. Here are some of the ways VMIs prevent these challenges and benefit laboratories and other facilities:
- Ensures supplies are readily available when needed
- More stable supply chain
- Lab and facility workers are more productive
- Reduced administrative costs
- Vendors can more accurately predict product demand
- Reduction in overstocking, improving cost-effectiveness
- Vendors/third-parties can suggest and implement opportunities for cost-savings
More benefits to VMI systems within laboratories can be found here.
How can a VMI help with lean medical and electronic manufacturing?
Lean manufacturing is a method of manufacturing that aims to reduce waste while maximizing productivity. Within medical and electronic manufacturing this means using all available resources in the most efficient way possible, in turn eliminating wasteful or unnecessary practices or materials and increasing efficiency. In doing so, one can improve cost-effectiveness. By implementing a VMI, medical and electronic manufacturing companies are able to utilize their workers in the most efficient way.
Allowing workers to focus solely on what is likely their strongest skillset improves productivity, decreases supply chain errors, and can also decrease the amount of idle time workers spend throughout their days. VMIs also allow for well-trained individuals to best utilize their resources in accurately predicting the need for certain items, placing timely orders, and finding ways to improve efficiency or reduce waste. In a lean manufacturing system that utilizes a VMI, there is a place and purpose for everything and everyone, resulting in a well-oiled production line and relationship between buyer and vendor.
Top Inventory Items in a VMI Program
Here's a list of the top inventoried items that are listed in the majority of the medical device and electronic manufacturing VMI programs:
- PPE (Personal Protective Equipment)
- Tweezers and Cutters
- Cleanroom Supplies
How can using a VMI system help with lab inventory replenishment?
Improved and easier lab inventory replenishment are perhaps the most obvious and readily enjoyable benefits of using a VMI. Many vendors and third-party companies have tried and true software and methods to track inventory trends and accurately predict future demand. This often results in smaller, more consistent, and more cost-effective orders for restocks. Entrusting lab inventory replenishment to vendors or third parties who are highly skilled and specialized also reduces human error from laboratory employees.
Vendor managed inventory systems have many far-reaching benefits. For more information on what to consider when implementing a VMI, please utilize this resource from Lab Pro.
For over 40 years, Lab Pro Inc. has been committed to delivering the highest quality chemicals, distance learning kits, lab supplies, and cleanroom PPE apparel to medical device companies and laboratories worldwide. To learn more, visit the biggest Lab Supply showroom in California, or contact us online or at 888-452-2776.