Packaging materials running out mid-shift cost money. So does holding six months of excess supply that takes up floor space and locks up working capital. Research cited by The Retail Exec puts stockout reductions from VMI at 31%, the result of suppliers managing replenishment from live inventory data. For packaging operations, that number matters: fewer stockouts mean fewer unplanned stoppages and lower emergency freight costs.
What Is Vendor Managed Inventory?
VMI shifts inventory monitoring and replenishment responsibilities to the supplier. Instead of your team manually submitting purchase orders and tracking usage, your packaging partner monitors stock levels and initiates replenishment when agreed thresholds are reached. The model runs on established minimums, maximums, and real-time consumption data, reducing the back-and-forth of reactive purchasing. Lead times become more predictable, emergency orders decline, and less capital is tied up in unused inventory.
The Real Cost of Inventory Imbalances
In many facilities, both problems stem from the same issue: purchasing decisions based on guesswork instead of accurate data.
When You Have Too Little
- Lines go down waiting on materials that should have been ordered sooner
- Emergency orders carry premium costs and expedited freight charges
- Downstream customers and fulfillment partners absorb the fallout
When You Have Too Much
- Excess packaging occupies floor or storage space needed elsewhere
- Working capital gets tied up in stock that is not moving
- Materials held past their window risk damage, obsolescence, and disposal costs
VMI puts actual consumption in charge of when stock gets replenished.
How VMI Works in a Packaging Supply Context
Getting a VMI program off the ground starts with a clear picture of actual consumption. Your Ternes representative works with your team to set three things:
- Baseline usage rates for each packaging SKU
- Minimum and maximum inventory thresholds based on lead times and consumption history
- Replenishment triggers so stock is reordered before levels fall too low
From there, Ternes monitors inventory through on-site visits, system integrations, or regular reporting and places replenishment orders without waiting for a manual purchase order from your team. The model fits well for high-velocity materials covered under Ternes’ packaging and crating solutions, including custom crates, export packaging, palletized builds, and protective dunnage.
Multi-line facilities and operations with seasonal demand shifts can adjust replenishment parameters as conditions change, without rebuilding procurement processes from scratch. Teams that need additional support can run warehousing and material handling services alongside VMI to close gaps in inventory flow.
Key Benefits of a VMI Program
Fewer Stockouts
When stock drops toward the threshold, the replenishment order is already in motion before your floor feels it. The reactive, last-minute order cycle stops.
Leaner On-Hand Inventory
Consistent replenishment removes the incentive to over-order as a precaution. Most facilities that move to VMI see on-hand stock drop without any reduction in fill rates.
Lower Administrative Burden
Routine reorder work moves off your purchasing team’s plate. That time is better applied to supplier evaluation, project work, or coordinating with Ternes’ procurement outsourcing services to sharpen sourcing across the supply chain.
Stronger Supplier Relationships
When suppliers can see your inventory in real time, they are part of the conversation before problems develop. Predictable volume also gives both sides a stronger basis for pricing discussions.
What to Expect When Working With Ternes Packaging on VMI
From automotive suppliers to fulfillment operations, Ternes has built VMI programs for Midwest manufacturers that work within existing workflows. It starts with an inventory audit: which SKUs cause problems, where demand is inconsistent, and what the current replenishment process is missing.
| Phase | What Happens |
|---|---|
| Inventory Audit | Current SKUs, usage rates, and problem areas are reviewed |
| Parameter Setting | Min/max thresholds and replenishment triggers are established |
| Monitoring | Ternes tracks levels via site visits, reporting, or system integration |
| Replenishment | Orders go out before stock falls below threshold |
Your team keeps control of the parameters. Ternes handles the execution.
Ready to Take the Guesswork Out of Packaging Inventory?
Recurring stockouts and excess stock are operational problems with a structural fix. Contact us to talk through what is driving the issue and learn what a Ternes VMI program looks like in practice. Prefer to start with a quick conversation? Let’s chat, and we will point you in the right direction.