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Sourcing Models · Compared

VMI vs Consignment vs Kanban vs Blanket PO

VMI, consignment, kanban, blanket purchase orders and spot buys differ on two questions: who owns the stock on your site, and who decides when to reorder. Answer those two and the right model for each part family usually follows.

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The Decision Table

How the five common sourcing models compare for fasteners and other C-parts.

ModelWho owns stock on siteWho triggers replenishmentCash impactBest forWatch-outs
Vendor-managed inventory (VMI)Set in the agreement; often the buyer once deliveredSupplier, from scans or counts at the point of useStock levels set and tuned by the supplierHigh-volume, repeat C-parts at the lineNeeds agreed min and max levels and regular reviews
ConsignmentSupplier until the part is usedSupplier, against agreed levelsPaid only as parts are consumedExpensive or slow-moving parts you must have on handUsage reporting and stock counts must be accurate
Kanban (two-bin)BuyerAn empty bin is the reorder signalBuyer holds two bins of stockSteady, predictable consumptionBin sizes go stale when demand changes
Blanket purchase orderBuyerBuyer, releasing against the blanketBuyer pays per releaseKnown annual volume, fixed termsReleases still need someone to raise them
Spot buyBuyerBuyer, order by orderPaid per orderRare, one-off or prototype partsHighest admin per line, no supply commitment

When to Use Each Model

Vendor-managed inventory

Use VMI when the cost of managing a part is higher than the part itself and consumption is regular. The supplier owns replenishment, so buyers stop raising routine orders. How CSG runs VMI.

Consignment

Use consignment to keep high-value or slow-moving parts on site without paying until they are used. It suits parts where a stockout is costly but turnover is low. Consignment inventory.

Kanban

Use two-bin kanban for steady demand where the line itself can signal the reorder. When the supplier collects the empty-bin signal, kanban becomes a simple form of VMI.

Blanket purchase order

Use a blanket PO when annual volume and terms are known and your team is happy to release against it. It fixes the commercial side but not availability.

Spot buy

Keep spot buying for prototypes, one-off repairs and parts too rare to plan. For anything repeat, the order cost adds up quickly.

Mixing Models Across Your Parts

Most OEMs end up with a mix: VMI for the high-runners, consignment for a few critical or expensive parts, and blanket or spot ordering for the rest. Getting there usually starts with supplier consolidation, so each family sits with one source before its model is chosen. C-parts management ties the models together on one programme.

Sourcing Model FAQ

Common questions when choosing how C-parts are supplied.

Both put replenishment in the supplier’s hands. In consignment the supplier owns the stock until it is used; in VMI ownership is set in the agreement and often passes to the buyer on delivery.

Not quite. Kanban is a pull signal, usually an empty bin. It becomes VMI when the supplier, not your team, reads the signal and refills the bin.

When volume is known, parts are few and your team has time to release orders. VMI pays back as the number of part numbers and sites grows.

Yes. CSG runs VMI, consignment and kitting side by side, so each part family can sit on the model that suits it.

Consignment, because you pay as parts are consumed. It also needs the most accurate usage reporting.

Choose the Model Part by Part

Send your part list and annual usage. We will suggest which families suit VMI, consignment, kanban or blanket ordering.