Demand-Driven Strategies to Strengthen Profitability

March 31, 2011

Manufacturers that continue to embrace the status quo run the risk of eroding profits and market share. As economic conditions decline, they are under pressure to identify new approaches that will differentiate them from larger, more recognized brands while deepening their relationships with distributors, wholesalers and retailers.
One proven approach revolves around vendor-managed inventory (VMI). This approach enables today’s underdogs to level the playing field and drive growth in hotly contested regional markets. By managing inventory on behalf of their customers, they can:

  • Reduce inventory, transportation and warehousing costs;
  • Increase visibility and accuracy;
  • Increase replenishment; and
  • Strengthen customer relationships.

A growing number of smart suppliers have recognized the competitive high ground to be seized as they deepen their connections to retail customers in regional markets. By adding value in the replenishment process through VMI, small- and mid-sized manufacturers can differentiate themselves from larger and better known brands. Most importantly, they can develop more loyal and profitable relationships with their retail clients as we enter the demand-driven future.

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