The Research Of VMI-based Coordination Strategy In Supply Chain

It's a new century which has more innovation and invention as well as systematic analysis and collaboration living.And the theory of supply chain management is just an active respondence of this world trend. VMI (Vendor Managed Inventory) is a new inventory managemnet where the circulating inventory of the downsteam business is managed and controled by the upperstream business. The key point of its successful operation lies in the adoption of the coordination strategy in supply chain where information sharing is promoted between suppliers and retailers. Used the strategy, whole supply chain performance can been optimized by regulated strategic partner relationship on the basis of fair pro-benefit.Based on the analysis and summary of research at home and abroad, this paper mainly concerns about the VMI-based coordination mechanism in supply chain. Firstly, it expatiates the background, significance as well as the related research about the coordination mechanism in supply chain. Then, relevant theories and strategies about the coordination mechanism in supply chain are briefly presented. Finally, it gives a detailed analysis of the influence exerted by the different Game structures of the suppliers and detailers on the performance of supply chain. With the analysis of the influence, this paper concludes that under the VMI mode the efficiency of the retailers, even the whole supply chain will be enhanced. However, the profits for the suppliers may be reduced because the suppliers have to undertake the inventory management for the retailors. Thus, the inbalance between responsibility and the interests occurs. Therefore, to ensure the effective implementation of VMI, in particular, to raise the enthusiasm of suppliers, the coordination strategy in suply chain has to be adopted. At last, the Pricing Incentive Mode could be formed provided that certain subsidies for the cost are given to the supplies by the retaiors.The study shows that the short- and long- term profits of both suppliers and retailers can be increased through the optimal procurement after the implementation of VMI, which greatly improves supplier's positivity of participation and cooperation ,thereby to facilitate the VMI's information sharing and assure its effective implementation.