Vendor Managed Inventory: Why you need to talk to your supplier

Frederik Zachariassen, Henning de Haas, Sirle Bürkland

Abstract


Purpose

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.


Keywords


Vendor Managed Inventory, total cost, inter-organisational relationships

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DOI: http://dx.doi.org/10.3926/jiem.1195


Licencia de Creative Commons 

This work is licensed under a Creative Commons Attribution 4.0 International License

Journal of Industrial Engineering and Management, 2008-2019

Online ISSN: 2013-0953; Print ISSN: 2013-8423; Online DL: B-28744-2008

Publisher: OmniaScience