Select parts and suppliers suited to vendor-managed inventory or consignment based on spend, volatility and trust.
Warehousing & Procurement
Vendor-Managed Inventory and Consignment Stock Agreements
Learn to design, contract and run vendor-managed inventory and consignment stock schemes that cut buffer stock while keeping service levels and ownership terms clear.
🗓️Duration5 training days
📚Content4 modules · 8 sessions
🎓On completionAccredited attendance certificate
About the programme
Course Overview
Buyers who hold their own safety stock against every supplier absorb working capital and stock-out risk that a well-run vendor-managed inventory or consignment arrangement can shift or share more efficiently. This course addresses a practical difficulty: pilots start with enthusiasm but stall because replenishment triggers are vague, ownership of stock in transit is disputed, or the supplier lacks visibility of real consumption. Participants learn to select candidate parts and suppliers, build the data feeds and min-max or kanban triggers that drive automatic replenishment, and draft the contractual clauses that fix title transfer, liability for loss or obsolescence, invoicing frequency and exit terms. The course covers consignment stock accounting treatment, cycle-count responsibilities on supplier-owned stock, and the governance meetings that keep both parties honest about forecast accuracy and service levels. Teaching combines technical input with a running case converting a purchase-order relationship into a VMI arrangement, negotiating the agreement clause by clause, and building the dashboard a category manager would use to monitor it. Participants leave able to judge which items suit VMI, write an agreement that protects both sides, and run the review that keeps stock and service on track.
Expected Learning Outcomes
Design min-max, kanban or reorder-point triggers that drive supplier-initiated replenishment accurately.
Draft consignment stock clauses covering title transfer, risk of loss, invoicing and obsolescence liability.
Set up the data feed and visibility tools a supplier needs to plan replenishment without over-ordering.
Establish cycle-count and reconciliation routines for stock the buyer holds but does not yet own.
Chair a joint governance review that tracks forecast accuracy, fill rate and inventory turns under the scheme.
Plan an exit or transition strategy that unwinds a VMI arrangement without disrupting supply.
Who Should Attend
Procurement and category managers considering VMI or consignment for key suppliers.
Inventory planners and materials managers who will operate the replenishment triggers day to day.
Warehouse and stores managers responsible for supplier-owned stock on their premises.
Finance and accounts payable staff who must handle consignment invoicing and stock ownership.
Supplier account managers negotiating VMI terms from the vendor side.
Supply chain analysts evaluating candidate items for inventory model redesign.
Course Modules
Select any module to see its sessions and points.
01Choosing Items and Building the Case for Shared Inventory Models
2 sessions · 8 points
Session 1Screening Spend Data for VMI and Consignment Candidates
- Segment the purchased-parts catalogue by volume, value and demand volatility to shortlist VMI candidates.
- Weigh supplier trust, lead-time reliability and data-sharing willingness before proposing a shared model.
- Distinguish items suited to consignment, where title stays with the supplier, from those suited to standard VMI.
- Build a business case comparing current safety stock and ordering cost against projected VMI holding levels.
Session 2Choosing the Replenishment Logic
- Configure min-max thresholds against historical consumption and required service level per stock-keeping unit.
- Design a two-bin or kanban visual signal for high-frequency, low-value consignment items on the shop floor.
- Set reorder points and order-up-to levels that account for supplier lead time and delivery frequency.
- Model the impact of demand spikes on trigger settings and agree escalation rules for exceptions.
02Drafting the Agreement and Data Infrastructure
2 sessions · 8 points
Session 1Contracting Title, Risk and Payment Terms
- Draft clauses fixing the point at which title and risk of loss pass from supplier to buyer.
- Set invoicing triggers tied to consumption events rather than delivery, with agreed reconciliation cycles.
- Allocate liability for obsolescence, damage and shrinkage of supplier-owned stock held on site.
- Write exit and termination clauses covering notice periods, residual stock buy-back and data handover.
Session 2Building Visibility and Data Feeds
- Specify the consumption and inventory-level data a supplier needs to plan replenishment without excess.
- Choose between EDI, a supplier portal or shared spreadsheet feeds based on volume and supplier capability.
- Agree data accuracy standards and a fallback manual process for system outages or new item introductions.
- Design a replenishment dashboard showing stock position, days of cover and pending deliveries by item.
03Operating the Programme Day to Day
2 sessions · 8 points
Session 1Managing Stock Ownership and Cycle Counts
- Assign responsibility for physical cycle counts and reconciliation of supplier-owned versus buyer-owned stock.
- Handle discrepancies between system records and physical counts under a shared inventory arrangement.
- Track obsolete or slow-moving consignment stock and trigger contractual return or write-off procedures.
- Coordinate storage location, labelling and segregation so consigned stock is never mistaken for owned stock.
Session 2Reviewing Performance and Handling Disputes
- Run a monthly joint review covering fill rate, forecast accuracy, days of supply and stock-out incidents.
- Address forecast bias with the supplier before it produces chronic over- or under-stocking.
- Resolve invoicing or ownership disputes using the reconciliation records agreed in the contract.
- Decide when to expand, pause or renegotiate the scheme based on measured cost and service outcomes.
04Scaling, Risk and Transition Planning
2 sessions · 8 points
Session 1Scaling VMI Across the Supply Base
- Prioritise which additional suppliers and categories to bring into a VMI programme after the pilot succeeds.
- Standardise contract templates and data feeds to reduce the effort of onboarding further suppliers.
- Assess supplier concentration and dependency risk created by expanding consignment across critical parts.
- Align VMI expansion with sourcing strategy so single-source risk is not increased without mitigation.
Session 2Planning for Disruption and Exit
- Build a contingency plan for supplier insolvency or withdrawal that protects continuity of supply.
- Agree how consigned stock is valued, recovered or transferred if the agreement ends unexpectedly.
- Test the transition process by simulating a supplier switch on a live consignment item.
- Document lessons from the programme to refine future VMI agreements and trigger settings.
What the participant receives
4 course modules
A structured syllabus
8 training sessions
across 5 days
32 detailed points
Applied, detailed content
Accredited attendance certificate
On completing the programme
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