Vendor Managed Inventory

Paper Summary:

This paper begins by defining supply chain and operations managements as an essential component to the smooth running of any operation or business. It then looks at the changing nature of supply chain management and how the practice is to move to Vendor Managed Inventory (VMI) method. VMI refers to a relatively new supply chain management method in which consuming party or buyer's inventory is maintained and monitored by the supplier. It explains how VMI works and its benefits for suppliers and buyers. The paper concludes by analyzing the implementation challenges of VMI.

From the Paper:

"Supply chain management is a major concerned of all large and small firms in today's highly unpredictable business environment. While the buyers or distributors are worried about timely deliveries of products and efficiency of products, manufacturers are more concerned about how their customers judge demand and place orders. This is because unpredictable changes in demand can force the customers to place orders for products whose production level has not yet been increased. For this reason, supply chain management has become a major issue."

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