Information exchange in vendor managed inventory

Vendor managed inventory (VMI) is a model for supply chain collaboration gaining ground in multiple industries around the world. Forecasting is one of several means to predict future demand. The purpose of this paper is to identify what types of advance demand data would be valuable to the supplier for successful replenishment planning in cases of VMI, frequency and means of information exchange.

The work is based on a literature review and a multiple case study where both successful and unsuccessful VMI collaboration programs are studied. In all cases, the supplier or the customer was a manufacturer. The discussion is based on case‐observations of causes and effects that are compared with existing literature.

It is found that current inventory status and sales forecasts are the most important kinds of information to be made available to the supplier in a VMI relationship. This also conforms with the general perception of the literature review. Some kinds of information are found valuable while other kinds are found not to be of importance. It was also found that kinds of information differ with the type of supply chain activities being performed by the customer, i.e. there is a different kind of information recommended when the customer makes to stock than when he is a wholesaler or a manufacturer making to order. This observation has not been discussed in the literature reviewed.

The value of generalization from case studies is subject to general discussion. The cases applied in this research encompass Norwegian suppliers and dyads at the upstream end of the value chain. Geographically related cultural differences might limit the applicability of this work.

The findings support the existing literature and this paper takes a practitioner's perspective on information sharing. The aim is to offer a comprehensive yet educational view of information sharing and VMI.