Principles, Benefits, and Pitfalls of Vendor-Managed Inventory

John Mello

Foresight: The International Journal of Applied Forecasting, 2017, issue 47, 31-36

Abstract: In the 1980s, Walmart and Procter & Gamble entered into a supply-chain initiative called Vendor-Managed Inventory (VMI), in which Walmart?s suppliers assumed responsibility for managing their products in the retail giant?s warehouses. Because the arrangement was so successful in significantly improving order fulfilment on merchandise, it attracted the attention of other retailers and, later, manufacturers. Here, Foresight S&OP Editor John Mello provides an overview of the basic structure of VMI, the benefits that can accrue to customer and supplier, and the pitfalls to be avoided. Copyright International Institute of Forecasters, 2017

Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:for:ijafaa:y:2017:i:47:p:31-36

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