fastener inventory management on or by the production line is called 'Vendor-managed inventory' VMI is a business model where the buyer of fasteners provides usage information to a fastener vendor who then takes full responsibility for maintaining an agreed stock inventory of fasteners and other C class parts at the buyer's consumption location. A third-party logistics provider can also be involved to make sure that the buyer has the required level of inventory by adjusting the demand and supply gaps.
FASTENER SUPPLY SYSTEMS
As a symbiotic relationship, VMI makes it less likely that a business will unintentionally become out of stock of fasteners and better controls inventory level in the supply chain.
One of the keys to making VMI work is shared risk. In some cases, if the inventory does not sell, the vendor (supplier) will repurchase the product from the buyer (retailer). In other cases, the product may be in the possession of the retailer but is not owned by the retailer until the sale takes place, meaning that the retailer simply houses (and assists with the sale of) the product in exchange for a predetermined commission or profit (sometimes referred to as consignment stock). A special form of this commission business is a scan the bin system, where VMI is usually applied.
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