Vendor Managed Inventory (VMI)
Stock is replenished and managed by the supplier. In many cases this takes the form of Consignment Stock. Allowing another company to manage your stock requires that you place significant trust in their performance. Be sure to complete a Vendor Quality Rating exercise.
Many suppliers now manage their side of the contract by installing some form of KanBan system. This can be a conventional two-bin system or it can utilise specialised vending equipment to record usage and report replenishment requirements electronically.