Vendor‐managed inventory: fashion fad or important supply chain strategy?

Abstract

Considers the concept of vendor‐managed inventory (VMI). Reviews its success since it was first implemented by Wal‐Mart and K‐Mart. Asserts that although a number of factors make the efficient operation of VMI difficult, the process is still relevant to supply chain management. The strategy is effective when the relationship between major retailers and major suppliers is constructive and open, and the party who is most able and in the best position to manage the supply relationship is in control of the supply chain.