VMI : A study of benefits with a VMI system

Sammanfattning: Abstract Today, the market is getting tougher and tougher and organisations need to concentrate more on the organisations core competence, to become successful and gain competitive advantage. One way to get this competitive advantage for an organisation is to start using Vendor Managed Inventory (VMI) system. A VMI system, with the help of Electronic Data Interchange (EDI), manages the informational and material flow between the distributor and the supplier by automation. This means that the supplier receives accurate information from the distributor, and can thereby plan deliveries of products when needed and at the right amount. These deliveries are done by automation and are based on the distributor’s shared information such as inventory- and sales figures. We have as a goal for this thesis to examine if the positive benefits described by literature do reflect those benefits with the benefits experienced by organisations. The following question will be discussed and answered during this thesis: • Do the benefits of a VMI system described in theories, match the benefits experienced by an organisation? To answer our question, we have interviewed two managers about their companies’ way to use VMI. One interview was performed at a store working in the retail market and the other interview was performed at a grocery store. The interviews were performed to receive a deeper understanding of what the managers think about VMI, and also to understand how these benefits have been beneficial for their company. After the interviews, we started to compare and analyse the benefits gathered from literature with the benefits experienced by the managers for the companies. The analysis and comparison proved that there is a similarity between the benefits gathered from literature and the benefits experienced by the interviewees. We decided to categorise the benefits into three different categories: costs, service and inventory. Believing that this categorization was a good way to get you as a reader to have a lucid overview of which the benefits are, and which area of business they are beneficial in. Many of the gathered benefits could affect more than one area of business, and many cases benefits are created through chain reactions, benefits breeds new benefits. The similarity of the benefits collected from the empirical findings compared with the benefits from theories, are striking, and we can thereby concluded that the experienced benefits by an organization using a VMI system highly represents the benefits described in the theories from literature.