1243017150_Chap010(3) - Vendor Managed Inventory (VMI)...

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10-1 Vendor Managed Inventory (VMI) Manufacturer access to POS information Replenishment automatically triggered Enables demand-based view of replenishment & production planning – reduce bull whip effect
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10-2 Vendor Managed Inventory (VMI) The vendor is responsible for maintaining the retailer’s inventory levels in each of its stores
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10-3 VMI Logistics Pack Make Ship Store Pick Pack Ship Receive Buy Decide Order Sell Factory Buyer Store Warehouse POS
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10-4 Order Time Time Time Time b Supplier Manufacturer Distribution Store Consumer Order Order Demand React to real demand can reduce inventory & out of stock Why VMI Works Reduce Bullwhip Effect
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10-5 VMI Limitation The vendor does not know what other actions (e.g., promotion) the retailer is taking that might affect the sales of its products in the future
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VMI—What it Lacked Focused on replenishment activity only Static-model based (assumed fixed reorder points to trigger replenishment) Often only moved
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1243017150_Chap010(3) - Vendor Managed Inventory (VMI)...

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