The relationship between vendor managed inventory and operational performance (original) (raw)
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Inventory Management Practices and its Effects on Vendor Managed Inventory Performance
The Vendor Managed Inventory (VMI) has long been implemented by many corporations due to its various positive effects it has towards the company's performance. At the same time, a number of success stories of VMI program have also been discussed by numerous authors. However, until now, there is no concrete conclusion on VMI has been clarified. Therefore, this study tries to shed the lights on the effects of inventory management practices, which include visibility of demand, replenishment decision, inventory ownership, inventory location, and inventory control limits on VMI performance. Quantitative methodology was chosen as the method to gather the data where those manufacturing companies being selected according to the list from the Federation of Malaysian Manufacturer (FMM). The data was gathered from 101 manufacturing companies whose manufacturing based located in Malaysia. Data analysis was conducted by employing descriptive analysis, factor analysis, reliability analysis, and a simple multiple regressions. The findings showed that visibility of demand and inventory control limits were the main predictor of service performance. Meanwhile, only inventory location contributes to cost performance of VMI. Manufacturing companies should urge their customer to share demand information and setting appropriate min-max limits of inventory levels in order to get benefits from VMI program. It was suggested for companies to consider to setup inventory storage or warehouse near to their customer's premises especially when engaging with abroad customers.
International Journal of Business and Social Research, 2012
Vendor managed inventory (VMI), also known as continuous replenishment or supplier-managed inventory, is one of the most widely discussed partnering initiatives for encouraging collaboration and information sharing among trading partners (Angulo, 2007). The main objective of the study was to investigate the influence of vendor inventory management on organizational performance in retail outlets in Kenya. The study adopted a descriptive research with survey of a total of 172 and applied a stratified random sampling technique to select a sample size of 86 respondents. Questionnaires were used as the main data collection Descriptive statistics and inferential data analysis method was to analyze the gathered data. The study concluded that that economic order quantity is affected by VIM thereby affecting organizational performance. The study recommends that VIM should be well implemented since it influences the organization to invest a lot of money in purchasing of inventory. Additionally the study recommends that organization should integrate all its inventory management functions with information communication technology as well as ICT realization. Organizations need to enhance Communication among staff members and customers.
International Journal of Social Science and Humanities Research (IJSSHR) ISSN 2959-7056 (o); 2959-7048 (p)
Vendor Managed Inventory practices play a major role in the operation of many organizations. These practices help to improve firm’s production scheduling, Information sharing, Stock replenishment and ultimately increase its operational performance. With the reported 46.4% of state corporations making losses, achieving Vision 2030 would be impossible without a critical look into how some of the practices including Vendor Managed Inventory. This study intended to fill this knowledge gap by examining the influence of Vendor Managed Inventory on operational performance of stores function in commercial state corporations in Kenya. The study was anchored on the Network Theory. The target population for the study was 906 Senior Management, Procurement Managers and Inventory Management Officers in the 54 Commercial State Corporations in Kenya. The researcher used the sampling formula recommended by Nassiuma to arrive at 99 sample size. Data collection was done through a structured open and ...
THE EFFECTS OF INVENTORY MANAGEMENT PRACTICES ON OPERATIONAL PERFORMANCE
Inventory management remains a significant challenge for county governments in relation to timely provision of high quality service to the public; forums have been organized across counties with the intention to foster an exchange of ideas around various issues including specialty products, new technologies, and reducing supplier risk from supply chain inadequacies and management of inventories. Despite all the efforts by the central government and County governments in Kenya still inadequacies are observed in the operational performance among counties. The purpose of this study was to evaluate the effects of inventory management practices on the operational performance of counties with particular interest of operations in Kisii county, Kenya. The specific objectives included establishing the effects of demand forecasting practice, inventory categorization practice; and Vendor managed inventory (VMI) practice on the operational performance of Kisii county, Kenya. The study established that supply dependability affect operational performance to a moderate extent 44.7%, effects of inventory categorization in terms of inventory for customer service is rated as the most influential on operational performance and free flow of order fulfilment of supplies, reduced inventories and timely replenishment of inventory to user departments influenced operational performance. The study recommends that procurement and supplies teams in the county should monitor demand forecasting of inventory for efficient operational performance and service delivery to the general public.
Inventory Management Practices and Operational Performance of Manufacturing Firms in Ghana
Advances in Research, 2020
Aims: The study examined the effect of different inventory management practices on the operational performance of manufacturing firms in Ghana. Study Design: The study adopted the descriptive survey design. Place and Duration of Study: The study was conducted among manufacturing firms within the Accra, Tema and Kumasi metropolises in Ghana between November 2019 and February 2020. Methodology: The study randomly sampled 152 Procurement and Operations managers and officers from 246 registered manufacturing firms with the Association of Ghana Industries. The manufacturing firms are specifically located within the Accra, Tema and Kumasi metropolises. The study gathered primary data using structured questionnaires of which analysis was done using both descriptive and inferential statistical tools including mean, standard deviation and ordinary least square regression. Results: Using 114 valid responses, the study found manufacturing firms in Ghana to have high preference for Strategic Su...
International Journal of Supply Chain Management, 2018
The purpose of this study is to understand the key success factor for success implementation and long-term sustainability of Vendor Managed Inventory (VMI). The respondents for this study was employees who work in supply chain related department in electronic and electrical industry in Malaysia. The independent variables include integrated system and common platform, relationship quality and commitment, information quality and clearly outline expectation and communication. While the identified dependent variable is the key success factor for VMI implementation and sustainability. The management commitment is regarded as moderating effect of the relationship between independent and dependent variables. The data is collected using online questionnaire and subsequently analysed using SPSS and PLS. The relationship of variables is tested and examined. The finding demonstrates quality of information have positive and significant relationship with long term sustainability and success implementation of VMI. Besides, the study gives implication that there is positive relationship between relationship quality and integrated system toward VMI sustainability but they do not have significant influence against VMI implementation and sustainability. While expectation have negative and insignificant influence towards VMI implementation. The moderator effect of management commitment been assessed as insignificant as well.
Performance outcomes and success factors of vendor managed inventory (VMI)
Supply Chain Management-an International Journal, 2008
Purpose - The purpose of this paper is to seek to investigate performance outcomes of vendor managed inventory (VMI) from a buyer's perspective and enablers for its successful application. Design/methodology/approach - Structural equation modelling through Partial Least Squares (PLS) is used to identify relationships between four enablers (information systems, information sharing, information quality, and relationship quality), perceived VMI success, and
2017
In Kenya many companies in manufacturing sector deploying Vendor Managed Inventory see failure due lack of demand sharing, attitude of employee towards changing of business model, supplier reluctance to hold higher inventory, requirement of standard product identification and integrated information system. The overall objective of the study was to assess the effect of Vendor Managed Inventory on supply chain performance in manufacturing sector in Kenya, a case of EABL. The study specifically aims to; assess the effect of demand forecasting on supply chain performance in manufacturing sector in Kenya; determine the effect of inventory management costs on supply chain performance in manufacturing sector in Kenya; establish the effect of information sharing on supply chain performance in manufacturing sector in Kenya and identify the effect of manufacturing planning on supply chain performance in manufacturing sector in Kenya. The study adopted a descriptive research design and the tar...
This study was about the effect of inventory control management systems on organization performance in Tanzania manufacturing industry: a case study of food and beverage manufacturing company in Mwanza City. The specific objectives of the study were to: determine the types and purposes of inventory control management practices followed ascertain the influence of inventory control management practices on organizational performance and determine how technology adopted in operationalization of inventory control management practices affect organization performance. In order to accomplish the objectives, qualitative approach methodwas adopted. Using purposive sampling, five participants in the inventory and production department were selected and interviewed. Data was analyzed using content analysis techniques with the aid of Nvivo Qualitative Analysis software. Other data was collected from documentary review company and industry published reports. The findings of the study revealed that the food and beverage manufacturing company had evidence of different types of inventories which included raw materials, work-in-progress and finished goods managed under FIFO system for cost reduction and production efficiency. It was also evident that the company carried inventory control management using perpetual inventory system done on periodic basis and inventory system is combined with acomputerized database of inventory quantities at various locations for updating in real time by store and warehouse using barcode scanners. It was also revealed that inventory control management system using principles of Economic order quantity [EOQ]affects organizational performance in terms of cost reduction, production efficiency, flexibility and profitability. The study recommends an implementation of new practices/models such as Vendor Managed Inventory (VMI) in the company's inventory control management.