Vendor-Managed Inventory Solutions Provided by 3PLs in the Life Sciences & Pharmaceuticals Industry

Vendor-Managed Inventory Solutions

Third-party logistics (3PL) providers specialize in maximizing their customers’ supply chain processes.

In recent years, 3PLs have innovated their practices to extend the pharmaceutical supply chain for special projects, such as packaging and kitting.

Vendor-managed inventory (VMI) is a natural evolution of these extended services.

VMI quickly gained a foothold with retail companies, but has failed to catch on as quickly in the life sciences and pharmaceuticals industry.

This white paper will introduce the concept of VMI and make a case for VMI as a cost-saving, qualityensuring life sciences and pharmaceuticals supply chain solution.

What is VMI?

Definition: Vendor-managed inventory (VMI) is a supply chain management initiative where the distributor is authorized to oversee product inventory.  

In VMI, the distributor assumes the role of inventory planning for the customer. Instead of the customer reordering when supply is exhausted, the distributor is responsible for monitoring and replenishing the customer’s stock.

This approach is meant to optimize supply chain performance, since the distributor can analyze demand and adjust supply in order to maintain the customer’s inventory levels.