A review of Vendor Managed Inventory (VMI): from concept to processes

Abstract

In the modern supplier–customer relationship, Vendor Managed Inventory (VMI) is used to monitor the customer's inventory replenishment. Despite the large amount of literature on the subject, it is difficult to clearly define VMI and the main associated processes. Beyond the short-term pull system inventory replenishment often studied in academic works, partners have to share their vision of the demand, their requirements and their constraints in order to fix shared objectives for the medium/long-term. In other words, the integration of VMI implies consequences for the collaborative process that links each partner's different planning processes. In this article we propose a literature review of VMI. Based on the conceptual elements extracted from this analysis, we suggest a VMI macro-process that summarises both operational and collaborative elements of VMI.

Keywords:

• Vendor Managed Inventory
• supply chain management
• collaboration