Applicability Study On Vendor Managed Inventory(VMI)

With the establishment of the market economy, the fierce competition among rivals from market, the increasing uncertainty of economic environment and customers'consumption, Supply Chain Management (SCM for short), indeed, has been in a process of gradually revising and focusing on the contents of plan itself continuously, on basis of the development of individual consumption, till the moment of carrying out the plan. Especially in 1990s of the 20th centuries, the core manufacturers concentrated themselves on how to achieve the effective management on inventories which aims to decrease cost and seek the maximum value of profits. Based on this objective, there are a lot of new ideas been sprung up in this field. The most famous is the one which the narrator is trying to focus on here----Vendor Managed Inventory (VMI for short).VMI originated from the retails'industry of U.S., and has been validated by many successful European & American enterprises. For Chinese, it took about 10 years to get well-known of this theory before applying it. Few successful experiences resulting from the new concept are just waiting for more great voices from others. Can this theory be widely applied in China? With this query, the narrator mainly aims to analyze the applicability study for VMI used in Chinese enterprises, based of her working experiences on this subject. Here, the narrator learnt some characters from the case of those enterprises who has had benefited from this theory, and with the detail description of VMI, finally drew on a conclusion that only certain enterprise is suitable for VMI, and the characteristics of this industry or product.During the case study, the body is from the interior working process for a manufacturing enterprise, and then, discussed about the inharmonious communication of different department, especially the problems of inventory management. For a further analysis, this is a real case----Kitchen & Bath Company A & B----which used methods of contrastive analysis. Finally, the narrator give a result on basis of her analysis: VMI can not be applied by any enterprises in any line unless it fits: 1. Standardized products with low differentiation, can be used by more than one customer. 2. Incoming inspection is not necessary once the sample approved. 3. Life cycle is long enough and is not liable to be design changed or obsolete. 4. Stable and massive needs from the market. Besides that, management support is essential to successful VMI.