THESIS PROPOSAL

Vendor Managed Inventory in Supply Chain Management



Vendor Managed Inventory in Supply Chain Management

Introduction

Understanding Supply Chain Management

In today's automated production process, the end product that reaches the consumer is a cumulative effort of multiple organizations, better known as the supply chain (Handfield, 2011). 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. This represents a conscious effort by the supply chain firms to develop and run supply chains in the most effective ways possible. These supply chain activities covers everything from product development, production, logistics, procurement as well as the relevant information systems required to coordinate all of these activities, to create a final product.

Furthermore, Handfield (2011) comments that the organizations that are made up of these supply chains are connected or linked together through dual flow of information and physical movement and storage of goods and materials. These represent the visible part of any supply chain. Similarly, Wailgum & Worthen (2008) opine that supply chain management is a combination of science and art that goes into improving the channel through which a company sets out to find the raw materials required to produce a final good or a service, and delivering them to the final consumer. In addition, they also highlight the five basic components of supply chain management, which include:

Plan: this component constitutes of extensive strategic planning related to the production of the final good or service. This includes planning and contingency planning of all the measures and activities that go into the final production and delivery process of the goods by the company. A diligent plan allows the company to save costs and improve its overall functions, ensuring high quality and value for their customers.

Source: this comprises of the procurement procedure and sources of raw materials required by the company to produce the final good and service. This includes evaluating and assessing the best suppliers of the raw materials available in the market and to develop a cost, payment and monitoring models. The supply chain managers are mainly responsible for the procuring of the raw materials from cost efficient and high quality promising suppliers, for the company.

Make: this component comprises of the manufacturing process of the good or service. It is the responsibility of supply chain mangers to schedule the time and testing procedures involving the production, packaging and delivering of goods and services. This component also greatly helps in improving the quality and productivity levels of the company's overall supply chain process.

Deliver: this component is related with the logistics aspect of delivering goods and services. Here, the company is involved in coordinating the orders with its customers and wholesalers, developing a network of warehouses ...