Vendor managed inventory (VMI) practice analysis in a supplier of consumer goods

Abstract

One of the widely discussed collaborative practices in the literature is Vendor Managed Inventory (VMI), which gives supplier the freedom to take decisions regarding customer´s replenishment, allowing better production planning. Despite the efforts of many researches, few studies compare the reality faced by companies with theories in the literature. Thus, this research aims to analyze the VMI practice of a consumer goods supplier with its retail customer, based on the barriers that limit the potential results of the practice and also the critical factors for the success of VMI. Insights from this analysis resulted in some propositions for future studies. The literature review allowed the identification of elements that influence the adoption and maintenance of VMI that were grouped into behavioral, cultural and physical elements. The method used was a case study with in-depth interviews, which allowed identifying the elements that limit the potential gains of VMI in the analyzed company and also those ones that contribute to the success of the practice.