Vendor Managed Inventory

The procurement team raises 200 routine POs every month for materials that replenish predictably. VMI could eliminate 80% of them.

High-volume commodity materials — salt, sugar, palm oil, packaging film — replenish on predictable cycles driven by a fairly stable consumption rate. The manufacturer's procurement team spends significant time raising, approving, and expediting POs for these materials — work that adds cost and delay without adding value. The supplier, for their part, is producing and delivering these materials in patterns they could predict more accurately if they had visibility of the manufacturer's stock and consumption.

Vendor Managed Inventory removes the PO cycle for routine replenishment — the supplier monitors the manufacturer's stock and triggers deliveries when stock falls below the agreed minimum level. The manufacturer receives the material, performs incoming inspection, and pays the invoice. The procurement team's time is freed for supplier development, strategic sourcing, and exception management.

Live workflow view

The step-by-step sequence

1. 1

   VMI agreement configured for selected suppliers

   For each VMI supplier, HublerX configures the VMI parameters — the materials in scope, the minimum stock level (the replenishment trigger), the maximum stock level (the delivery ceiling), the standing order frame agreement reference, and the supplier's delivery lead time. The supplier is given access to the HublerX VMI portal for their materials only.

   Configuration · reviewed annually
2. 2

   Supplier sees stock position in real time

   The VMI supplier portal shows the current stock position and days-of-coverage for each VMI material in real time — updated as GRNs are received and production consumption is posted. The supplier can see when their material is trending toward the minimum level and plan their production and delivery accordingly.

   Continuous · supplier portal
3. 3

   Supplier triggers replenishment delivery

   When the stock of a VMI material falls below the agreed minimum level, the supplier raises a delivery notice in the HublerX portal — specifying the quantity, the lot number, and the expected delivery date. The delivery is raised against the standing order frame agreement, not a new PO. The manufacturer's planning team receives a notification of the incoming delivery.

   When min level is reached
4. 4

   Delivery received and inspected

   The VMI delivery is received, inspected, and released through the standard incoming inspection workflow. The GRN is posted against the standing order. The stock position updates immediately. If the material fails inspection, the supplier is notified through the VMI portal and a replacement delivery is requested.

   On delivery receipt
5. 5

   Invoice matched and payment processed

   The supplier submits their invoice against the GRN and the standing order. The three-way match — purchase order frame, GRN, invoice — is performed automatically in the ERP. Payment is processed on the agreed terms. The procurement team does not need to intervene in routine payment cycles.

   On invoice receipt
6. 6

   VMI performance reviewed monthly

   HublerX generates a monthly VMI performance report for each supplier — stockouts under VMI, fill rate, delivery lead time, inspection pass rate, and coverage trajectory. The report is the basis for the quarterly supplier review — where VMI parameters are adjusted, scope is expanded or contracted, and the relationship is assessed.

   Monthly · automatic

Results are directional. VMI effectiveness depends on supplier willingness and capability to manage replenishment, and the stability of consumption patterns.