VMI Methods – What Is Right For You? JIT? Consignment?

If you’re just starting to dive into the world of vendor managed inventory, you may find these terms are very popular. At times they can even feel synonymous, but they’re really not. Both JIT and Consignment are methods of inventory management. They each have their own benefits.

Just-In-Time

Just-in-time (JIT) is a method of inventory management in which your vendor supplies you with materials as you need them. You don’t keep a quantity of these materials on hand. As such, you only buy and pay for materials you will actually use.

A JIT production schedule is determined by your vendor based on agreed upon business rules. Utilizing this method can increase efficiency in your supply chain and reduce your total cost of ownership. You will only pay for materials as they go out the door, no warehousing costs.

Consignment Inventory

Comparatively, consignment inventory is a method of supply chain management in which the vendor maintains an inventory of material in your warehouse. Your vendor owns those materials until they are consumed into your manufacturing process. This means you don’t have to worry about inventory carrying costs. With this method, you can also enjoy the added benefit of peace of mind. Materials are right in your warehouse whenever you need them.

EPI Marketing Services

In either method, you reduce costs and administrative effort associated with managing your own inventory. If you’re trying to choose the right VMI method for your supply chain management, our team can help.

EPI helps companies to manage their print and subcomponent inventories. Our comprehensive VMIEdge solution can help you reduce the total cost of ownership for your printed materials and non-print subcomponents. To learn more, schedule a consultation with our team.