Supplier managed inventory is the case where the company does not track its own inventory, but suppliers track the company's inventory and ship it as needed. This allows them to track what their actual demands are, as there is little surplus, allowing customers to not only get a newer product that hasn't been sitting on the shelf for a longer period of time, but also allows them to customize the product. final product more. Think Ford Model T. "you can have any color, as long as it's black" People will pay more to be able to customize their products, which everyone else has. I own a Nissan Versa, and in addition to customizing the fries and car seats, I have placed other items on my car that make my care more valuable to me and less valuable to me.