The accuracy issues discussed thus far also carry financial implications for the vendor/customer relationship. As noted in the fourth point, the customer not only avoids the use of purchase orders in the VMI model but also self-bills. Taken together, the elimination of purchase orders and invoices affords huge gains in productivity. The administrative gains from eliminating invoices, however, are dependent on the ability to account for all of the raw materials consumed in production over a predetermined period.

Albeit in a different context, inventory accuracy is once again critical to the overall operation. In this instance, production has already been completed and title has passed from the vendor to the manufacturer. Now it is time to get paid. However, if there are any unresolved issues pertaining to the inventory, in particular the ability to accurately account for consumption, the customer will not pay, which unnecessarily delays collection of receivables.

In any business model, the accuracy and availability of raw materials inventory are basic to supply chain velocity. In terms of a VMI operation, its very survival depends on it. However, the challenges of operating a successful operation are not just limited to what goes on in the warehouse.