Introduction
Direct Store Delivery (DSD) / Vendor-Managed Inventory (VMI) is a supply chain model in which suppliers take an active role in managing and replenishing inventory at the retail or customer location. Rather than relying on traditional purchase orders, vendors monitor sales, stock levels, and demand patterns to determine when and how much product to deliver.
In a DSD model, products are delivered directly from the supplier to individual stores or points of use, bypassing central warehouses. VMI complements this approach by transferring inventory planning responsibility to the vendor, supported by shared data and agreed service levels. Together, these models improve on-shelf availability, reduce stockouts and overstocking, and enhance supply chain responsiveness.
By aligning incentives and improving visibility across the supply chain, DSD and VMI help organizations optimize inventory costs, streamline operations, and strengthen collaboration between suppliers and customers.
Feature Vendor-driven inventory replenishment
Real-time visibility of stock levels and sales data
Direct delivery to stores or points of use
Reduced reliance on purchase orders
Improved product availability and fewer stockouts
Optimized inventory levels (less overstock and waste)
Faster response to demand changes
Stronger collaboration between vendor and retailer
Lower inventory holding and administrative costs