The word “Supplier” here stands in for the name of... they apply specifically to your program. Italicized sections indicate...


The word “Supplier” here stands in for the name of your company. Check all answers to make sure they apply specifically to your program. Italicized sections indicate answers that are more likely to have answers specific to your program.

Frequently Ask Questions Regarding Vendor Managed Inventory

Q: I like my Inventory Management System why should I let Supplier manage my inventory?

A: Supplier will not replace your current ERP platform, rather we would supplement your system. We’ll take responsibility for day to day ordering and free up your valuable resources to maximize ROI, and provide the value of Supplier expertise and product insight through VMI’s collaborative ordering process. Your ERP system will still see the inventory so you can evaluate at any time just the same as you do today.

Q: Is there a cost associated with Supplier’s VMI Program:

A: There will be some upfront investment in man hours during set-up but there are no fees associated with our VMI program. There is a data transmission cost, but this would exist with EDI, regardless of involvement in Supplier’s VMI program.

Q: What’s in this for Supplier, why do you want a distributor on VMI?

A: Many reasons but the most important are:

 Better visibility into channel demand which helps with forecasting which helps delivery performance.

 Visibility into the “health” of our distributors’ inventory. Do we have the right products on the shelf?

Q: Will I lose control of my inventory?

A: No. Supplier’s VMI solution will provide:

 Continuous access to information, allowing regular monitoring of inventory details and measurement against objectives

 Reports and exception alerts that ensure any potential problems are recognized early so they can be collaboratively addressed and avoided

Q: Will the supplier try to take advantage of us or put their goals above ours?

A: No. A good VMI solution will be based on mutually agreed objectives, shared information, and continuous reporting that make the process highly transparent. Supplier recognizes the need to maintain a high level of trust with our customers - a transparent system makes it clear to both parties if performance criteria is not being met.

Q: Will Supplier's system really handle my needs?

A: Yes – Supplier’s VMI solution is provided in conjunction with Datalliance, the world’s leading VMI provider. This means that Supplier’s VMI system is:

 Designed by VMI specialists

 Delivered and managed by professionals with many years of VMI experience

 Used every day at thousands of locations

 Refined over time to handle just about any customer environment effectively and efficiently

Q: Our business system is difficult to work with - will it be able to share the information required for


A: Almost certainly. Your system just needs to be able to regularly create a product activity report.

Q: Will sensitive information like sales, usage, or inventory figures be kept confidential?

A: Yes. Information like demand and inventory is required for effective VMI, but detail information about the end customer (e.g. sales price, address) is not.

Q: Will Supplier's system be reliable?

A: Yes. By partnering with Datalliance, Supplier’s solution will be managed around the clock, with data center operations that include:

 High availability features such as: redundancy, fail-over, 24x7 systems management, and environmental considerations

Technical and VMI specialists ready to address any problem that may arise

 Reliability metrics measured on a daily basis

A well-documented disaster recovery plan that is tested regularly

Q: We deal in special items with Supplier. Many items do not have UPC codes. How will these problems be handled efficiently?

A: The Datalliance system Supplier uses allows items to be matched through catalog ID’s or even a simple cross-reference. This early matching process not only enables VMI, it also saves money downstream because it eliminates inaccuracies in orders, invoices and payments.

Q: We have been ordering the traditional way forever, why would we change now? In other words, if it ain’t broke, why fix it?

A: Change is a constant. If a customer wants to remain competitive into the next century you must anticipate -- look for ways to ‘fix it’ before it breaks. VMI has proven to provide excellent bottom line results in a variety of industries.

Q: We manually edit every line item on every purchase order. We check for things like surplus material in a branch. Will VMI perform this step?

A: To decrease the amount of time spent and to lower the number of human errors introduced into the process, Datalliance reduces the need to edit each and every line item of every order. It also includes logic to look for surplus material on slow selling items. This, combined with a series of 30+ checks

performed on every item on every order, directs Supplier to the items that need attention. The combination of this process and the associated edits results in consistently clean orders.

Q: How much time do you need from me to get started?

Q: Are you saying my buyer hasn’t been doing a good job?

A: No. Even the best buyer who builds the most wonderful orders can’t know every variable because many of them are on the supplier’s side. Things like how many units the supplier has on hand, size of units and trucks, and manufacturing lead times are all things that a VMI system can take into consideration that traditional ordering doesn’t. The benefit of VMI is that both parties get access to information that was previously hidden from them.

Q: Is VMI the same as consignment?

A: No. Some suppliers will use VMI in a consignment relationship -or the other way around- but Vendor

Managed Inventory deals with who generates orders, consignment is an ownership arrangement.

Questions Datalliance can’t answer for you, but are commonly asked

Q: What happens if I end up with Excess Inventory?

A: Because Supplier would be placing the orders, we will cover the cost of returns including freight charges. See Terms for any exceptions, i.e., custom product or dates sensitive.

Q: Why are you interested in VMI with me specifically? Why am I a “fit” for your program?

Q: Who else do you work with? Anyone near me?

Q: What parts / product lines are you managing?

Q: How will this affect my pricing and rebates?

Q: Will my PO’s be fulfilled first if I’m on VMI?

Q: What other benefits will you give me if I join your program?

Q: What if I don’t like it?

Q: How will I know if it’s working or not?

A: Datalliance recommends formal performance reviews somewhere between quarterly and annually.