Customer Owned Vendor Managed Inventory (VMI) Agreements

Customer owned VMI agreements exist between a supplier and their customer where instead of the customer monitoring its sales and inventory for the purpose of triggering replenishment orders, the vendor assumes responsibility for these activities.

After a VMI agreement is established, a customer effectively outsources their inventory management function to their supplier. The supplier assumes responsibility to maintain a required inventory level at the customer's location.

Note: When you establish a customer owned VMI agreement with your customer, the customer owns the inventory.