Service · VMI

We hold inventory.
You pull on demand.
Capital efficient.

Vendor-Managed Inventory (VMI) services. We hold buffer inventory of your parts, ship per your demand pull. Reduces your inventory carrying cost, eliminates production lead time at order, simplifies procurement to scheduled releases.

Vendor-Managed Inventory Quote Supply chain mgmt

Pre-built inventory 24-48hr ship from stock Simplified procurement Capital efficient

01 · VMI models

VMI program structures.

Different VMI structures suit different customer needs. We support various models from simple buffer stock to integrated demand planning.

Buffer stock

Customer-owned at us

We hold inventory in customer-paid forward position. Inventory invoiced when produced, held until shipped. Standard pricing model.

Consigned inventory

We own, customer pulls

We retain inventory ownership, invoice on shipment to customer. No customer capital tied up. Typically 5-10% premium over standard pricing.

Min/Max replenishment

Auto reorder

Customer sets min/max inventory levels. We automatically replenish when inventory drops to min, holding to max. Customer doesn't need to issue individual POs.

Kanban pull

Demand-driven

Customer Kanban signal triggers replenishment. Common for production lines with steady demand. We track Kanban signals and resupply.

Forecasted production

Plan-based

Customer provides production forecast. We build to forecast, hold inventory, ship per actual orders. Smooths our production while serving customer needs.

JIT (Just-in-time)

Daily/weekly delivery

Daily or weekly scheduled deliveries to customer's production line. We hold inventory, deliver per schedule. Customer minimizes inventory at their location.

Sequential delivery

Production-line scheduling

Parts delivered in production-line sequence. Common for automotive Tier-1 supply. Each delivery includes parts in sequence used at customer's line.

Web portal access

Customer visibility

Customer accesses inventory dashboard online. See current stock, recent shipments, forecast vs actual. Procurement transparency.

Periodic invoicing

Monthly summary

Single monthly invoice for all VMI shipments. Simplifies AP processing vs individual PO/invoice cycles.

02 · VMI benefits

Customer benefits.

Reduced lead time

Stock available means immediate shipment

Lower inventory cost

We hold inventory, customer holds less

Capital efficiency

Less customer working capital tied up

Production smoothing

We even out production while customer's demand fluctuates

Procurement simplification

Replenishment automatic, fewer POs to manage

Predictable supply

Buffer stock cushions against supply disruptions

Quality consistency

Same supplier, same lots, predictable quality

Faster response

Customer demand spikes met from inventory

Cost predictability

Pricing locked in for inventory holding period

FAQ

Vendor-Managed Inventory questions.

Typical buffer: 2-3 months of demand for steady-state programs. For demand variability, more buffer. For seasonal patterns, build pre-season inventory. Specific amount calculated per: average demand, demand variability, lead time to replenish, customer service level target. We work with customer on optimal inventory model — too much costs money, too little risks stockouts.

Two models: (1) Customer-paid: customer pays for parts when produced, holding charge for storage. Lower per-unit cost, customer carries inventory cost. (2) Consigned: we retain ownership, invoice on shipment. Customer pays only when used. Higher per-unit cost, customer no inventory cost. Choose based on capital efficiency vs price preference.

For demand reduction: built inventory must be consumed eventually. We work with customer on consumption plan. For severe reduction (program cancellation), inventory may need to be scrapped — cost shared per agreement. For demand increase: we ramp production. Buffer accommodates short-term spikes; sustained increase requires capacity expansion. Standard escape clauses in VMI agreements.

Same quality as standard production. Inventory regularly cycled — FIFO (first in first out) ensures no aging issues for most metals. For materials with shelf-life concerns (some adhesives, specific plastics), inventory dating tracked, expired material disposed properly. Customer receives fresh stock per pull.

Inventory typically held at our Wuxi facility. For customers needing local stock (US, EU, Asia), we can establish local stocking through partner warehouses. Trade-off: faster delivery vs additional cost. For high-volume programs justifying local stock, customer-specific arrangement possible.

VMI valuable when: (1) Steady ongoing demand (not one-off projects). (2) Customer has working capital constraints. (3) Quick response time matters. (4) Production line with predictable consumption. (5) Multiple part numbers to coordinate. For one-time projects or highly variable demand, traditional PO model often adequate. For sustained production, VMI typically saves cost and improves service.