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Vendor Managed Inventory Essay

Vendor Managed Inventory (VMI), is an effective approach in supply chain management. The vendor becomes fully responsible for the upkeep of inventory upon specified conditions at the point of manufacturing or agreed locations. Both the customer and the vendor benefit in this arrangement. The customer is cushioned from inconveniences that may arise due to work overload on the part of the manufacturer. He therefore enjoys dealing with a single entity and further protects him from incurring extra costs. Expenses such as insurance costs and costs on transit are undertaken by the vendor.

Due to specialization, the vendor has the chance to maximize in skills acquisition of products handling and effectively connects manufacturer and the customer. He takes precarious responsibilities and might incur huge losses in the process but puts the products at a competitive advantage thereby improving business and uplifting company’s profile. A deeper examination into the supply chain drastically brings down costs and at the same time raising levels of products quality (Hult, 2004). The vendor evaluation tool comes in handy when the procurement section of a company wants to approximately select a vendor to undertake a specific job.

This is mainly because, different vendors are specialized in handling different products

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and their levels of efficiency are also different. Conclusion Procedures and measures involved when dealing with products from offshore manufactures must ensure that global supply chain protects consumers. Quality monitoring systems are best suited in handling such discrepancies. A good example is the procurement of drugs from offshore sources hat may be substandard. Effective quality control programmes such as site inspection, verification, sample testing and confirmation of shipped products go along way in enhancing customer satisfaction.

Furthermore, manufacturers are heavily investing in quality control programmes with the aim of availing quality products and services to the customers. Instances of products returns are minimized or eliminated and such unnecessary expenses involved in products returns reduced or done away with. Collaborating with other companies or competitors in developing quality control systems ensure universal conformity on guidelines regarding quality measures. Innovations and technologies to eliminate supply chain efficiencies is an effective technique in quality enhancement.

The quality of food outsourced from offshore sources must be safe from contamination. Global sourcing of goods is a complex process involved in supply chain management.


Burgess K. , Singh, P. , and Koroglu R (2006). Supply chain management: a structured literature review and implications for future research. Queensland Rail, Brisbane, Australia Cunningham, D. C. , (2001). Supply Chain Management: The distribution and extent of agrifood chain management research in the public domain. Supply Chain Management Journal, Vol. 6 (5), 212-215

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