Vendor Managed Inventory: Providing Visibility Across the Pharma R&D Supply Chain

Vendor managed inventory (VMI) is a concept in which stock is monitored, planned and managed by suppliers based on expected demand and previously established threshold levels. Although manufacturing and retail companies have relied on these practices for some time, top pharmaceuticals companies only began experimenting with this concept for R&D supplies management in the early 1990s. At that time, the pharmaceuticals industry (top pharmaceuticals companies in particular) increased its focus on R&D. With increasing cost pressures and the spread of R&D functions to pharma company operations in numerous geographic outposts, the need for a lean supply chain became paramount. This need led to increased adoption of VMI by pharma industry players and for R&D supplies in particular.