Design of vendor managed inventory system for automotive company - a case study

The practice of supply chain management has shifted the responsibility for inventory control to the vendors, leading to the concept of vendor managed inventory (VMI). In order to meet customer demands, vendors must ensure appropriate quantities of storages at the point of demand and must ensure optimal distribution plans that include routing of the distribution vehicles. This paper discusses a detailed literature review of VMI. Existing VMI model for an automotive company is studied in detail and the critical flaws in the present system are identified. This paper proposes information sharing methods, empirical model for supplier segmentation and proposed VMI system with necessary implementation steps for the case company.