CMI stands for Customer Managed Inventory. It is a business practice or system that allows customers to take an active role in managing and controlling their own inventory levels. Rather than relying solely on the supplier or vendor to ensure that the right products are available at the right time, CMI empowers the customers to have direct control over inventory management.
In a CMI model, customers have access to real-time inventory data and are responsible for monitoring stock levels, placing orders, and managing replenishment themselves. This system leverages technology, such as computer software or cloud-based platforms, to provide customers with visibility into product availability, usage patterns, and demand forecasts.
By implementing CMI, customers are able to optimize their inventory levels, as they have a deeper understanding of their own needs and requirements. It helps to decrease inventory costs, as excess stock or shortages can be more effectively managed. Moreover, CMI often leads to improved efficiency, faster order fulfillment, and better customer satisfaction due to increased control and transparency in the supply chain.
CMI is typically used in business-to-business (B2B) relationships, where customers are often large or influential enough to take an active role in inventory management. This approach requires close collaboration between customers and suppliers, as both parties need to coordinate and align their inventory strategies for successful implementation.
