Strategic VMI Implementation: Moving Beyond Transactional Purchasing in LATAM profile: Carlos Velásquez Rada https://carlosvelasquezrada.com/ Vendor Managed Inventory (VMI) is often misunderstood. Many leaders in Latin America see it as a simple cost shift. They think it just moves inventory costs from the retailer to the supplier. This view is wrong. VMI is a strategic tool. It synchronizes demand signals and reduces the "Bullwhip Effect." It also changes the relationship between trading partners. For companies in Chile, Peru, Mexico, Brazil, and Colombia, VMI is the next step. You must move beyond simple transactions. You need a truly collaborative model. The Evolution of Supplier Collaboration Think about the traditional purchasing model. First, the buyer creates a forecast. Then, they add a safety stock buffer. Finally, they send a Purchase Order (PO) to the supplier. The supplier receives this order blindly. They do not see the actual sell-out data (POS). So, they react by adding their own safety buffer. This creates layers of extra stock. We call this "inventory fat." Vendor Managed Inventory reverses this logic. The buyer stops placing orders. Instead, the supplier takes full responsibility. They maintain inventory levels at the buyer's warehouse. They follow agreed limits (Min/Max). This requires trust. It also needs strong data integration. As I discussed in Collaborative Logistics Platforms, technology is the bridge. However, the culture is the key foundation.
Strategic VMI Implementation: Moving Beyond Transactional Purchasing in LATAM
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