Best Buy Eyeing Supply-Chain Overhaul

Best Buy is moving closer to a restructuring of its supply chain.

Best Buy is moving closer to a restructuring of its supply chain.

The Minneapolis-based consumer electronics giant is expected to switch to vendor-managed inventory and to have product shipped directly to stores instead of to its Franklin, Ind., music and video distribution center. It already began with movie vendors back in October and WEA is expected to be the first music distributor, beginning in early March.

For the move to vendor-managed inventory, Best Buy is said to be using a system from Detroit-based Vision Information Services that enables music vendors to identify their inventory in each store and make suggestions to Best Buy concerning stock.

Most of the majors welcome the change but it is creating nervousness in the independent sector because the new system clearly will result in a significant reduction in the number of suppliers selling directly to the chain.

Sources suggest that in addition to being able to prepare shelf-ready product, indie vendors chosen to be VMI partners will have to do substantial billing with the chain.

Many indies are still sweating the word on whether they are selling direct or whether they will be left out in the cold. If they are then they must sell to whichever company Best Buy chooses to co-manage the indie sector and some suggest that will be Handleman Co. in Troy, Mich.

Best Buy and Vision Services didn’t return a call for comment. Handleman declines comment.

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