SUPPLY CHAIN MANAGEMENT

Vendor Managed Inventory in Supply Chain Management



ACKNOWLEDGEMENT

I would like to thank my supervisors, friends and family, without their support this research study would not have been possible.

DECLARATION

I adjudge that the entire content of this dissertation is entirely my own work; the content used in this dissertation has not been submitted before in any educational institution and represents my own opinion.

Signed __________________ Date _________________

ABSTRACT

The fundamental aim of this research study is to understand in detail the relationship between two consistently misconceived principles, vendor managed inventory and supply chain management, and both concepts can be used simultaneously however increasingly they are used on an individual basis. Through this study the aim is to highlight whether there is a relation between both concepts and whether they can be used in a more profitable manner which ensures that the user experiences various benefits.

ACKNOWLEDGEMENTii

DECLARATIONiii

ABSTRACTiv

CHAPTER 1: INTRODUCTION1

Background of the study1

Understanding Supply Chain Management1

Understanding Vendor Managed Inventory (VMI)3

CHAPTER 2: LITERATURE REVIEW6

CHAPTER 3: METHODOLOGY10

CHAPTER 4: ANALYSIS AND DISCUSSION14

CHAPTER 5: CONCLUSION AND RECOMMENDATIONS16

References17

CHAPTER 1: INTRODUCTION

Background of the study

If the recent years have taught businesses one fundamental principle to govern businesses it is the fact that establishing personal connections and maintaining a strong communication with the suppliers provides organisations the opportunity of creating loyalty amongst the suppliers and hence gaining a competitive advantage. Various researchers had posited theories which stated the with the advancement of technology and the constant use of technologically advanced devices and the internet would reduce communication however this has not been the case instead technology has played a pivotal role in promoting communication, this increase in communication has identified a greater need to have stronger supply chain management systems which were not previously stressed upon to such a great extent. Supply chain as a practice and concept have over the years transformed from being considered as solely a production process, to being reckoned as a chain of activities that result in the delivery of the final product to the customer.

Henceforth, supply chain management can be described as an active management of supply chain activities that are utilized to maximize customer value and sustain a competitive advantage for the business. Previously supply chain management was considered for the purpose of predicting consumer demands and lowering costs. With changing trends this aspect of supply chain management took another turn. The present situation within the market stresses the fact that the better and organisations supply chain management the greater the company will have a visibility and the incorporation of technology also helps in maintaining a check over production, costs and timely delivery. In short it can be understood that supply chain management has been recognized as a huge factor that helps organisations in gaining a competitive advantage over competitors. In order to improve the overall system of supply chain management a number of initiatives have been taken by organisations with the intent of further improving the supply chain management, in particular to this study the concept of vendor managed inventory is gradually increasing in ...