IMPLEMENTATION OF VENDOR MANAGED INVENTORY: PRACTICES AND ISSUES (original) (raw)
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A review of Vendor Managed Inventory (VMI): from concept to processes
Production Planning & Control, 2010
In the modern supplier-customer relationship, Vendor Managed Inventory (VMI) is used to monitor the customer's inventory replenishment. Despite the large amount of literature on the subject, it is difficult to clearly define VMI and the main associated processes. Beyond the short-term pull system inventory replenishment often studied in academic works, partners have to share their vision of the demand, their requirements and their constraints in order to fix shared objectives for the medium/long-term. In other words, the integration of VMI implies consequences for the collaborative process that links each partner's different planning processes. In this article we propose a literature review of VMI. Based on the conceptual elements extracted from this analysis, we suggest a VMI macro-process that summarises both operational and collaborative elements of VMI.
Analysis of vendor managed inventory practices for greater supply chain performance
International Journal of Logistics Economics and Globalisation, 2010
For a globalised supply chain to be responsive, the firm should have the ability to meet short lead times, respond to wide ranges of quantities demanded, handle a large variety of products, build highly innovative products and meet a very high service level. Vendor managed inventory (VMI) is one such supply chain practice where the vendor is given the sole responsibility to monitor and manage the inventory of the retailer. This paper attempts to analyse this supply chain practice and illustrate the key elements of this system and the role it plays in the overall supply chain. The benefits and risks of the VMI system are also analysed. The design and implementation steps for this supply chain practice are extensively reviewed. The analysis of industries which would benefit from implementing this system is also conducted. An investigation is attempted to see if any industries in the UAE are using VMI.
Patterns of vendor‐managed inventory: findings from a multiple‐case study
International Journal of Operations & Production Management, 2009
Purpose -This paper aims to address two questions: what kinds of benefits are realized from a vendor-managed inventory (VMI) program (operational, i.e. efficiency related, vs strategic, i.e. sales related) and how the benefits are shared at the dyad level (suppliers vs buyers). Design/methodology/approach -The paper uses an exploratory multiple case study with data from five operational VMI dyads, evaluating both buyer and supplier perspectives. Findings -Three empirically grounded patterns of VMI are proposed. Five contextual inhibitors of VMI impacts are suggested.
Prerequisites to vendor-managed inventory
International Journal of Production Research, 2012
Vendor-managed inventory (VMI) has become a widely used tool for supply chain performance improvement. However, not all VMI implementations are successful. Therefore, the aims of this research are to contribute to a better understanding of the critical issues surrounding VMI implementation, and to support corporate practice with a methodology for evaluating the VMI readiness of firms. Fifteen features that determine the suitability of VMI are identified. These can be broadly categorised as product-, company-, and supplierrelated features. The framework developed in this research is validated through its application in 10 case study firms. The framework can be used by other firms to support the decision of whether or not to adopt VMI by providing valuable insight into how firms score on suitability for VMI adoptions along several dimensions.
Various Issues Concerning Vendor-Managed Inventory (VMI)
INTERNATIONAL JOURNAL OF ADVANCED PRODUCTION AND INDUSTRIAL ENGINEERING, 2019
The presentmarketenvironmentisvery volatile and characterized by tough global competition. Technologies are changingrapidlywithhugecustomer’sdemand. To handlethese situations, companiesneed to manage innumerablerequestsfromtheirstakeholders. Hence, they are under immense pressure to lowertheirproductprices and reducetheiroperationalcostsat the same time as the demand for quick, safe and flexible deliveriesfromcustomers are increasing. In order to staycompetitive and remain in market, itisessentiallyrequired to learn how to meettheserequirements and fulfil the expectations of customer. Sometimesvendors are betteratpredicting the sales of theirproducts in distributer’s stores than the distributers. Consideringthisfact, vendormanagedinventory (VMI) model canbe a technique for providing best solution for managingorders of seasonalgoods, high turn-over items or perishableproducts.VMIisalsocalledcontinuousreplenishment or supplier-managedinventory. This paperdiscusses about the various is...
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
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.
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.
Key Success Factors of Vendor-Managed Inventory Implementation in Taiwan's Manufacturing Industry
Journal of Global Information Management, 2016
Under increasing pressure from competitors and consumers, vendor-managed inventory (VMI), which is believed to be conducive to reducing inventory costs and improving distribution and sales, has been a popular system particularly in the retail industry. This present study, by adopting the modified Delphi method, attempts to identify key success factors of VMI implementation in Taiwan manufacturing industry and examine impact of the identified factors. Through three rounds of expert questionnaires, it is found that excellent project management, organizational fit, information sharing, trialability, and top management commitment are the five most important factors in terms of VMI implementation in Taiwan manufacturing industry. Employee training, a good project team, exercise of power, and relative advantages are of secondary importance to Taiwan manufacturing industry. Finally, it is hoped that these identified factors may serve as a guide for manufacturing companies in implementing V...