Integration activities in modern supply chains lead participants to seek concepts and related practical solutions that enable high efficiency for logistics processes implemented within the chain. One of the significant aspects of supply chain functioning is the optimization of inventory levels throughout the entire chain, which in many cases translates into the ability to gain a sustainable competitive advantage for the companies that form the links of the supply chain.
A comprehensive concept of logistics management integration includes the use of diverse logistics strategies, among which one can mention the concept of inventory reduction. Within this concept, one can distinguish such continuous inventory replenishment techniques as CMI (Common Managed Inventory), CPFR (Collaborative Planning, Forecasting and Replenishment), CRP (Continuous Replenishment Program), or VMI (Vendor Managed Inventory). In the article, the authors draw attention to the factors determining the implementation of the VMI technique in enterprises, and subsequently present the process of its implementation at Kujawska Fabryka Manometrów “KFM” SA and the associated organizational effects.
Vendor Managed Inventory
Since the moment Vendor Managed Inventory (VMI) was first applied in the early eighties by companies such as Wal-Mart and Procter&Gamble, a large number of works have been created examining the benefits it provides to supply chain participants. Vendor Managed Inventory involves transferring the responsibility for operational inventory management to the supplier, in accordance with arrangements accepted by both parties (the recipient and the supplier), which take the form of a written agreement that regulates the obligations of the parties in detail. Vendor Managed Inventory can be defined as an operating practice consisting of transferring the responsibility for order quantities and delivery dates to the supplier. This is possible in a situation where the supplier receives information from the recipient regarding the inventory levels of specific product categories.
The article comes from the “Logistyka” magazine 1/2008.