Vendor Managed Inventory: Why you need to talk to your supplier
Abstract: The purpose of this
paper is to investigate the concept of Vendor Managed Inventory (VMI) from an
inter-organisational perspective. Extant literature on VMI tends to investigate
the concept from a focal perspective, even though VMI has originally been born
as a collaborative arrangement.
Design/methodology/approach
The paper is based on a literature review and an empirical study. It
provides a comprehensive literature review on VMI and an illustrative case
study of a supplier and a buyer jointly implementing VMI.
Findings
The findings of this paper are twofold. First, a literature review
uncovers that contemporary research has delimited the analysis of VMI to a
focal company perspective as current VMI cost models tend not to capture the
picture of the complete supply chain. Second, it demonstrates through an
illustrative case study that adoption of an inter-organisational approach to
VMI is vital if companies are to optimize their buyer-supplier relationships.
Research limitations/implications
Future research should test the implications proposed in the empirical
section, as this piece of research can be seen as exploratory case study
research with the aim of analytical generalizations.
Practical implications
The inter-organisational VMI cost perspective in supply chains should be
emphasized in purchasing departments since such a perspective significantly
raises the awareness of the costs incurred in a supply chain.
Originality/value
Existing research has not explicitly focused on inter-organisational
costs incurred by companies implementing VMI. This study seeks to bridge this
research gap.
Author: Frederik Zachariassen,
Henning de Haas, Sirle Bürkland
Journal Code: jptindustrigg140088
