Supply chain performance improvement using vendor management inventory strategy

This paper considers supply chain performance improvement in a real case study, a Chinese medium-sized aluminum manufacturer. The case supply chain is first described through process mapping. Its inefficiency is analyzed in relation to the associated information flows and material flows. A vendor managed inventory (VMI) strategy is developed and applied to the case supply chain. It is shown that the VMI strategy can significantly improve the supply chain performance such as reducing customer order cycle time and reducing safety inventory costs. Other benefits to the manufacturer and its suppliers and the implications of the VMI implementation are discussed.