Vendor-Managed Inventory for Fleets: What the Vendor Counts and What You Still Own

Scenario: a vendor offers to manage your stock of edges, bolts and shoes so you never run out. Direct answer: vendor-managed inventory can reduce workload, but you still own certain responsibilities: usage data, minimum levels, storage conditions and the decision when to trust the count. Use the decision tree to test whether it suits you. This is not legal advice and describes no particular vendor.

Decision tree

• Do you have reliable usage records for parts?
  • No: build them first. A vendor cannot set sensible levels without data, and neither can you.
  • Yes: go to the next question.
• Is your demand predictable enough to set minimum and maximum levels?
  • No, it swings with storms: agree how levels change before and during winter, and who decides.
  • Yes: go to the next question.
• Who owns the stock until it is used?
  • Vendor (consignment): ask who pays for loss, damage or obsolescence, and what insurance applies.
  • You: ask how it is invoiced, and what happens if stock is not used.
• Can you verify counts?
  • Yes: agree audit rights and a schedule.
  • No: you are trusting a number you cannot check; reconsider.

What the vendor counts and what you still own

Points to settle in writing

Vendor-managed inventory moves the risk only if the contract moves it explicitly.

1. Ownership, risk and insurance of stock.
2. Price, review rights and any minimum purchase.
3. Audit rights and counting method.
4. Exit terms and what happens to stock if the agreement ends.

Start small

If you try it, begin with the fast-moving, low-value parts such as bolts and washers, where mistakes are cheap. Add edges once you trust the counts and the delivery. Review after one winter and decide whether to extend.

Boundary: This is not legal advice and describes no vendor or contract; confirm ownership, risk and insurance terms with your adviser.