Vendor Managed Inventory Opportunities in Industrial MRO Markets

Industrial MRO buyers globally are increasingly shifting their MRO purchasing to distributors or aggregators from existing OEM suppliers to benefit from supply-chain cost savings realized due to vendor consolidation, e-procurement opportunities, inventory management opportunities such as JIT(Just in Time), VMI (Vendor Managed Inventory), POU (Point of Usage), vending machines as well as continuous improvement opportunities on account of technical consulting and on-site support provided by these distributors to the buyers This paper discusses the opportunities in VMI engagement of MRO supplies available for global industrial MRO buyers in key MRO markets. The paper studies the various VMI techniques implemented by major MRO distributorﾃ??s at large buyer locations in both developed markets such as US & Western Europe as well as emerging MRO markets such as APAC (India & China). The paper then evaluates the impact of these techniques in saving product acquisition and supply chain costs to the buyers. The findings of this paper are based on various case studies and expertﾃ??s view of how major global MRO buyers are increasingly demanding for supply & inventory outsourcing, reduction in PO transactions and vendor consolidation opportunities from suppliers for their MRO needs.