Implementation of VMI Practices in an Autmotive Firm
Abstract
Vendor Managed Inventory (VMI), as a collaborative planning,forecasting and replenishment philosophy helps in building the relationship between the vendor/supplier and the buyer. The need for optimization of supply chain process requires mutual trust, rapid information sharing and good logistics system. In an automotive firm, such initiatives become more crucial in sustaining global competition. VMI helps in minimizing the costs and maximizing profits. When a firm produces different variants of products and sells them through hundreds of dealers’ network, the things become more challenging. The better way of doing things is the VMI business model. It has also been discussed that implementation of VMI may bring in the added benefits of information sharing, reduced inventory carrying and ordering costs, mutual trust and collaborative relationships. The present paper is based on the successful implementation of VMI in an automotive firm of north India. The data for the same has been collected from primary sources.