Research On The VMI Service Model Base On TPL For Automotive Industry Suppliers Of Raw Materials

With the growth of demand for high value-added logistics services, providingspecialized and personalized integration of supply chain logistics services has become one ofthe most competitive business models for the third-party logistics enterprises. Meanwhile,Vendor managed inventory (VMI), as a representative of the integrated supply chaininventory management mode, has been widely used in various industries since its firstsuccessful applications by Procter&Gamble (P&G) and Wal-Mart (Wal-Mart). However,due to the disadvantages of VMI strategy, VMI is not widely used in supply chainmanagement. To better implementation of VMI, suppliers and manufacturers turned tothird-party logistics providers.This paper will combine above two hot issues: TPL developing value-added services andsolving the drawbacks of VMI, and analysis the VMI service model base on TPL deeply. TheVMI service model is that under the VMI mode, the TPL enterprise, as the leader in VMIoperation, provides inventory management service to several suppliers and manufacturers inthe supply chain, by taking charge of maintaining the inventory level through the MRPprinciples.In this paper, research work is summarized as follows:(1)Turned VMI strategy into a new type of value-added logistics services; Analyzed theoperation mode of the VMI service by TPL. It includes the driving factors of the VMI service,the integrated mode of logistics and information and the operation process of the service.Research results provide guidance for TPL to develop new value-added services.(2)Build mathematical model and analyzed the feasibility of the VMI service and theexpected value-added benefits based on the mathematical model. Then it proves thecorrectness of the mathematical model through the specific examples and sensitivity analysis.The conclusion is that the VMI services carried by TPL can add value for customers.(3)Combined with the characteristics of the auto supply logistics, discussed how TPL todesign and implement the VMI system for parts suppliers and auto manufacturers. It includesthe overall functioning model, the operations process in VMI warehouse of TPL and theoperational flow of milk-run. Finally, the paper proves the correctness and feasibility of the mode through the case studies.