Are you ready for VMI?
Not every company benefits. This methodology can help you decide
By Tarikere T. Niranjan, Stephan M. Wagner and Bublu Thakur-Weigold
Vendor managed inventory – VMI – long has been considered a best practice to integrate the supply chain. It is one of the best-known solutions to the bullwhip effect, in which inventory builds up along the supply chain in a pattern of delay, distortion and amplification, while product availability plummets. Information handoff between supply chain nodes – like the orders sent from buyer to supplier – is a potential source of uncertainty that triggers the devastating wave. VMI simply eliminates this bullwhip trigger and is credited with many other benefits.
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