Implementation vendor managed inventory in electronic manufacturing

Abstract

A supply chain (SC) is described as a chain in which raw materials are obtained, products are manufactured in one or more factories, transported to a distribution warehouse, supplied to retailers, and eventually reach the customer's hand. Supply Chain Management (SCM) is the strategic coordination of key activities and strategies across functions inside a specific business as well as across its supply chain partners in order to improve the long-term performance of the individual organisations and the supply chain as a whole. Supply chain management has been increasingly significant in the industrial world in recent years. Inventory management is one of the most critical concerns in the supply chain that may have a significant impact on the chain's performance. Demand in the upstream portion of the chain is dependent on orders produced in the downstream part of the chain, and because of market uncertainties, inventory management has become a highly difficult issue. According to the traditional supply chain structure, each member of the chain has their own inventory policy to enhance organisational performance. Due to a lack of information sharing among members, upstream members are uninformed of actual client demand. Now, with the VMI method to information exchange in the supply chain, the supplier has access to the customer's inventory and demand information. The research results show that by using the VMI approach, can enhanced the inventory alignment, enhancing overall financial performance and improved business performance.