What are VMI and EDI?
Vendor Managed Inventory (VMI) is an electronic technology-based solution between a wholesaler and a vendor that utilizes an automated system to cross-analyze data from both parties in order to determine a customer’s optimum level of inventory and to make certain that those levels are maintained. Electronic Data Interchange (EDI) is the technology that provides the vehicle for communicating inventory activity, as well as eventually transferring the purchase orders and acknowledgements, advanced ship notices and receiving documents (if desired) and invoices — virtually eliminating the chance of errors in the order entry process. VMI users benefit from fewer transactions, significantly reduced costs for those transactions, more complete orders, faster shipments, increased service levels and greatly improved operating efficiency. Yet despite these benefits, a number of misconceptions have sprung up about VMI. The most common are that VMI costs too much, that it invades a company’s privac
