VMI and SMI programs: How economic value added can help sell the change
International Journal of Physical Distribution & Logistics Management
ISSN: 0960-0035
Article publication date: 1 September 2003
Abstract
Supplier managed inventory (SMI) and vendor managed inventory (VMI) have emerged as potential first steps towards successfully integrating activities and information across multiple firms. Despite the potential benefits, managers interested in these programs often cannot generate the “buy‐in” among fellow management and executives or among those in the collaborative firm. The barriers stem from a misunderstanding of the concepts and an inability to demonstrate their potential effect on shareholder value across both firms. This paper draws a distinction between SMI and VMI and identifies where the approaches should be applied. A simultaneous economic value added (EVA) analysis from the customer and supplier perspectives is proposed as a means to demonstrate the effect on shareholder value, measure performance, and overcome the obstacles confronting implementation.
Keywords
Citation
Pohlen, T.L. and Goldsby, T.J. (2003), "VMI and SMI programs: How economic value added can help sell the change", International Journal of Physical Distribution & Logistics Management, Vol. 33 No. 7, pp. 565-581. https://doi.org/10.1108/09600030310499268
Publisher
:MCB UP Ltd
Copyright © 2003, MCB UP Limited