Development of a Vendor Managed Inventory (VMI) Program


Faced with both rising packaging costs and inadequate delivery from their supplier(s), International Rectifier (IR) was looking for ways to better control their existing packaging expenses.


Sourcentra worked with IR to develop a Vendor Managed Inventory (VMI) Program that satisfied their needs by providing cost-effective ESD packaging, delivered globally to all manufacturing sites when required.


Sourcentra and IR determined the appropriate stocking levels for more than 50 SKU’s. Additionally, Sourcentra analyzed the future purchasing requirements of these products and IR issued a blanket purchase order for the year’s purchases, locking in the most cost-effective pricing. A weekly inventory report is generated to alert IR to the minimum quantity of product on hand at any given time. Sourcentra matches the “ON HAND” requirements determined by IR and fulfills the weekly product requests the next day. IR is only invoiced for the product when it is delivered.

IR benefits by reducing its packaging costs, substantially reducing the inventory requirements of each SKU and eliminating the wait time for product delivery.