Kellogg Graduate School of Management Northwestern University

Kellogg

Operations
Logistics and Supply Chain Management

Vendor Managed Inventories

VMI is essentially a distri ution channel operating system where y the inventory at the distri utor!retailer "dist!ret# is monitored and managed y the manufacturer!vendor "mfg!vend#$ It includes several tactical activities including% determining appropriate order &uantities% managing proper product mi'es% and configuring appropriate safety stoc( levels$ )he rationale is that y pushing the decision ma(ing responsi ility further up the supply chain% the mfg!vend will e in a etter position to support the o *ectives of the entire integrated supply chain resulting in a sustaina le competitive advantage$ Centrali+ing the replenishment decision also helps reduce the distortions in ordering introduced when there are several intermediaries that place orders in a supply chain,$ VMI is typically the opposite of the inventory management approach ta(en y most organi+ations today$ Currently% orders are pulled through the supply chain y each partner as inventory levels reach -replenishment!re.order- points$ )his historic approach only serves to incent channel partners to optimi+e their individual lin( in the supply chain at the e'pense of su .optimi+ing the overall supply chain$ VMI% on the other hand% wor(s in the reverse to lin( partners together and to grant authority to the partner who is in the est position to ma(e inventory replenishment decisions$ )his entity is usually the mfg!vend partner given its upstream position in the channel$ /istorical improvements in supply chain effectiveness have een achieved through efficiency gains$ )hese include spending less time on physical inventory counts% less time finding misdirected inventory% and less time entering data into large customi+ed systems$ 0ven innovations such as cross. doc(ing were essentially ways of accelerating the distri ution system and reducing the cost of intermediate steps$ 1dvance shipping notices "1SNs#% ar coding and other electronic enhancements rought savings y decreasing supply chain inventory% speeding up the distri ution process and saving handling costs for oth shipper and receiver$ VMI% however% includes these concepts ut is also the first approach which allows information to e used more intelligently$ )herefore% a strategic element as well as a technological competency are the two primary mechanisms necessary for successfully gaining enefits from VMI$ )he ena ling technology ehind successful VMI is electronic data interchange "02I# which provides mfg!vends with essentially the same point of sales "34S# and inventory information retained y the dist!ret$ 1s a result% improved forecasting is possi le ecause the mfg!vend can o serve demand for its product over a wider range of customers and can incorporate the effects of promotions% competing products% and seasonal variations in demand$ )herefore% successfully integrating systems technology in the transactions etween value chain participants is integral to reali+e enefits of VMI$ )echnically% VMI has e'isted for far longer than has 02I and related concepts$ 5or e'ample% 5rito.Lay deliver truc( drivers restoc( retailers6 shelves without first going through the store owners ecause involvement from store management would e non.value added$ 02I simply allows VMI to e applied to a roader range of products and for more value.adding analysis to e conducted on availa le data$ Nevertheless% organi+ations that are ta(ing VMI to test have egun to reali+e that a -tailoredapproach to incorporating oth the strategy and technology is essential to success$
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See the eer game discussion for details$

This note was written by Fernando del Cid, Roger Gordon, Brian Kearns, Paul Lennick, and Andreas Sattleberger under the su er!ision o" Sunil Cho ra, Pro"essor o" # erations $anage%ent, &' L' Kellogg Graduate School o" $anage%ent, (orthwestern )ni!ersity' Copyright 7uly 8% 9::: y Kellogg Graduate School of Management$ )o order copies% call "8;<# ;=,.>?:>$ No part of this pu lication may e reproduced without the permission of the Kellogg Graduate School of Management$

Vendor Managed Inventory

Issues When Introducing VMI

Initial pro lems with VMI often relate to systems!data limitations$ Initially it is pro a ly est to narrow the focus of VMI and to etter understand configuration% operational% and procedural issues prior to larger.scale implementation$ 5or success it is (ey to e a le to move vendor relationships in a direction of minimi+ing total supply chain cost for all sta(eholders$ )he cost saving enefits will then e availa le to all parties$ 1 pilot program may incorporate the following elements 1 few vendors "any that are already running VMI with other customers# who represent top suppliers in terms of relationship% competency% and willingness to test VMI concepts in an active supplier.distri utor relationship should e considered$ 1n 02I protocol standard to transmit information nightly has to e agreed upon$ 1 set of SKUs involved must e decided upon$ Initially a high degree of human involvement may e re&uired till the system sta ili+es$

1t this point% the pilot program often runs into process and conceptual concerns that are typical of organi+ations moving to true full.scale VMI$ )hese include@ )he elief that the dist!ret can manage its inventory etter than their vendors due to the customi+ed nature of their systems and the responsiveness of their replenishment team% and their dedication to minimi+ing inventory while maintaining appropriate stoc(ing levels in support of high customer cycle service rates$ )he limitations of e'isting computer system$

)he overall goal must e to support total value chain cost minimi+ation y pushing decision ma(ing on replenishment activities furthest up the supply chain$ )his approach supports cost savings ecause the value of pooling orders and producing to accurate demand patterns with timely information "i$e$% varia ility minimi+ation# yields lower inventory investment if e'ecuted effectively$ )he comple'ity% however% is in allocating the savings gained to each participating supply chain sta(eholder effectively and fairly$ 1s a enchmar( to measure progress of the pilot program% the company can initiate improvement goals for vendors involved in the pilot program$ /owever it is important that VMI e implemented in its truest sense% else it will e difficult to assign a cause to any failures$ 3ilot programs tend to reveal several challenges for implementing the concept@ redefining the relationship with the vendor% handing over previously considered proprietary information% new processes and *o tas(s% setting up new metrics for measuring the vendor6s performance% and esta lishing electronic connections are some of the (ey issues$ )hese and other issues will need to e resolved collectively y supply chain partners and can ta(e considera le time ut% nevertheless% move the organi+ation in the right strategic direction$

VMI BEST PRACTICES

Ahat have organi+ations een a le to gain as a direct result of incorporating oth the strategic and technical elements of VMI in their operationsB 5rom our research% VMI can have a num er of enefits% including lowered investment in the supply chain "due to etter forecasting#% 7I) delivery and

Vendor Managed Inventory

less overstoc(ing# and greater inventory turnover$ Its primary enefit% however% is improved customer service due to fewer stoc(outs and more optimal product mi'es$ Mfg!vends also stand to enefit from VMI% as it allows them to schedule production and transportation more efficiently "including ordering raw materials#% to o serve end.user consumption and general mar(et trends more closely% and to develop closer ties with their customers$ In summary% the enefits are as follows@ Typical Benefits to Mfg/Vend Lower inventory investment "raw and finished# Cetter scheduling and planning Cetter mar(et information Closer customer ties and preferred status Typical Benefits to Dist/Ret 5ewer stoc(.outs with higher turnover Cetter mar(et information More optimal product mi'es Less inventory in channel "transfer costs# Lower administrative replenishment costs

1s previously mentioned% it is clear that a num er of critical components must come together to form a successful VMI program$ If these components are present the results can e dramatic@ 1t K.mart% customer service measures have gone form the high 8:s to the high =:s$ Inventory turns on seasonal items have gone from > to etween ,: and ,,% and for the non.seasonal items form ,9. ,D to ,<.9:$ 1C0 /ardware% the large hardware cooperative% has seen fill rates rise ;E to =?E in the past few years$ 5red Meyer% the ,>,.unit chain of supercenters in the 3acific Northwest% reduced inventories >:E to ;:E% while sales rose and service levels increased to =8E$ )his was due to a VMI program implemented with two (ey food vendors$ Grand Union% a New 7ersey. ased grocery retailer with more than ,:: stores and three 2Cs% improved inventory turns y close to 8:E and achieved ==E service levels$ )his significantly improved sales y eliminating out.of.stoc( conditions and dramatically reduced warehousing costs$ 4shawa 5oods% a F? illion Canadian food distri utor and retailer% had tremendous success with 3ills ury% Gua(er and /$7$ /ein+ with turns improving from > to = times% while achieving customer service levels of ==E$ )his% however% came after some initial ad*ustments in the program ecause of the hasty nature of initial implementation$ 3anduit% one of the largest manufactures of components for the electrical industry with ?:K s(us was a le to leverage its mar(et position to develop a new computer system to reduce replenishment costs which were s&uee+ing profita ility out of the entire supply chain$ Cecause its distri ution networ( didn6t see cost savings in the incorporation of VMI% 3anduit developed a new turn(ey VMI!02I system called Gualified Supplier 3rogram "GS3# created y an e'ternal vendor 1dvantis specifically in support of a tailored approach for its industry$ 1s a result% 3anduit claims that their distri utors are providing etter service to their customers% out of stoc( conditions have een reduced to a minimum% and its customers are tightly lin(ed as long.term sta(eholders in its usiness ensuring long.term supply chain sta ility$

)he reasons these highlighted organi+ations have een a le to achieve dramatic improvements are widely varied% ut center around a strategic approach to viewing the entire supply chain$ Specifically% these include@

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Vendor Managed Inventory

5ocus your 0fforts )rust and 3artnership etween Supply Chain Sta(eholders /ighly 0ffective Computer Systems Competent Mfg!vends and the 1 ility to 5orecast Ailling Sta(eholder 3artners and 3atience

Focus your Efforts

1s one senior principal at 02S9 put it@ -)he average illion.dollar company may have 9:%::: suppliers% and you can6t do 02I with 9:%::: companies$ $ $ H ut if the company limits 02I to the suppliers that account for 8: percent of their purchasesI then you6ve gone down to may e 9:: suppliers% and you can do 02I with 9:: companies$- Since 02I is fundamental to VMI% the same principle applies when moving to a VMI solution$ 1nother e'ample is 1C0 hardware% where only ,>E of the volume is handled y VMI sources$ In a survey of the mass retail industry% respondents e'pected vendor managed programs to e'ceed ,:E of volume in hard goods in the ne't three years and <E of soft goods$ )herefore% it is important to note the concept of focusing on partnerships where each participant is capa le or at least willing to develop VMI competency$

Trust and Partners ip !et"een #upply $ ain #ta%e olders

If the VMI program does not have credi ility and is not uilt upon a foundation of trust% then it is useless to try to implement it$ 4ne grocery chain% Spartan Stores% -pulled the plug- on their VMI program% and they freely admitted that a lac( of trust was a main reason the program failedJ or as they put it% -)he uyers trusted the suppliers% ut not as much as the uyers trusted themselves-$ 1ccording to Spartan6s director of purchasing% -Cecause the VMI efforts have een less than perfect% they Hthe uyersI did what they did efore% plus they were monitoring it li(e cra+y$ 1nd if something went wrong% they ended up getting directly involved$ )here has never een enough credi ility in the process alone that you could *ust ignore it$)herefore% we elieve that not only is the support of top management fundamental to esta lishing the trust etween the firms% ut that operational employees must e sufficiently incentivi+ed to support a trusting orientation$ )rust% however% is a hard thing to created overnight$ 4rgani+ations must wor( over time to support such arrangements similar to 7apanese organi+ations that have formed functional departments specifically to generate closer partnership ties with suppliers$

&ig ly Effective $o'puter #yste's

It is a undantly clear that in every company that we enchmar(ed in the pursuit of $understanding VMI% effective systems were a (ey to the successful implementation of VMI$ 1s one e'ecutive at 1C0 /ardware put it% -don6t entertain thoughts of fa'ing-$ 1dmittedly the costs of 02I!VMI are significant and according to )he 02I Group% > in ,==D the cost of a -/u - "A$ A$ Grainger# to communicate with several suppliers was F9::%::: a year and re&uired >$8? employees
02S is a ma*or systems integrator that also has support of a consulting practice "1) Kearney# that speciali+es in assisting organi+ations ecome cost competitive with technology applications "li(e VMI!02I% etc#$ > )he 02I Group supports studies on the status of 02I and is located in 4a(Croo(% Illinois$
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Vendor Managed Inventory

dedicated to it$ )he cost of a -Spo(e- for a smaller company communicating electronically with only a few firms is F9:%::: a year and re&uired ,$D; employees$ )he enefit is o vious% nevertheless% the systems limitations must e overcome to support long.term strategic approaches especially considering Grainger6s start.up approach$

$o'petent Mfg/Vends and t e (!ility to Forecast

)he theory upon which VMI is founded is that the mfg!vend is more competent to manage and forecast inventory than their dist!ret partners$ 1ccording to 7ohn Ahite% one of the mem ers of the logistics steering committee for the International Mass Ketailers 1ssociation% the theory wor(s as follows@ -Ketailers are used to a trigger point mechanism% sometimes called model stoc($ Lou try to set model stoc( ased on forecasting% ut that6s a reactionary system$ Not many retailer systems are set up on 2K3 logic$- )he e'tent to which the mfg!vend can etter manage their own inventory and shipping ased upon etter information from the dist!ret% sets the limits on the success of the VMI program$ 0ssentially% VMI attempts to use 34S data and (nown inventory levels to optimi+e production so that oth manufacturing and distri ution costs are minimi+ed and customer demand is met$ )his is o viously a very comple' tas(% and Grainger has to evaluate their suppliers to *udge their competencies in all of these areas as additional mfg!vend partners are selected as the pilot program is e'panded$ K.Mart% who we have cited throughout this review for their successes with VMI% has scaled ac( their VMI program to *ust D: suppliers "from a high of >::#$ )his reflects the ina ility of many of their suppliers to effectively forecast% which resulted in higher out.of.stoc(s with some items$ )he failure of K.Mart and the su se&uent re.focusing indicates that significant investment in developing ones mfg!vend6s competencies in forecasting and inventory management are a (ey tenet to successful VMI programs$ 1t some point% however% re.focusing may e necessary if its affiliate partners are una le to move on VMI effectively$ 1n alternative e'ample from K.Mart6s e'perience is Ahitehall.Ko ins% who have een a le to achieve success from their innate (nowledge of the production facilities$ Ahitehall.Ko ins (nows how to uild inventory with K.Mart if the 1dvil plant is scheduled for downtime ecause their forecasting systems are highly integrated$ 1s a result% product returns have also een reduced ecause pre.season ul( discounts have een eliminated in favor of wee( to wee( forecasts and deliveries$

)illing #ta%e older Partners and Patience

4ne standard for choosing suppliers was provided y Grand Union% who selected vendors that were mar(et leaders in their respective categories% as well as technology and supply chain innovators$ )his included the realistic perspective that no VMI program could e set up overnight$ Similarly% time was needed where at 5red Meyer management started in ,==, y implementing 02I% then in ,==9 moved to computer.assisted replenishment programs$ In ,==> they finally moved to VMI$ It too( significant time and investment% ut it paid off and continues to do so today$ Nonetheless% some VMI programs have een set up &uic(ly$ 4shawa 5oods set up their $ program with 3ills ury in ? months% with Gua(er in > months% and with /$ 7$ /ein+ in >$D wee(s% in part ecause these trading partners -claimed- to already have varying degrees of e'perience with VMI$ 1s a result of this hasty approach% 4shawa ran into many pro lems similar to Grainger6s initial attempt at VMI two years ago$ In the end% 4shawa was a le to gain measura ly% ut it too( a minor re. focusing$ In total% VMI est practices can e uncovered when one understands that significant effort will yield results$ 0ach organi+ation was a le to -tailor- their approach ased on specifics of their industry D

Vendor Managed Inventory

and competencies of their supply chain partners$ 5or some% success was negligi le% for others it was significant and led to other paradigm shifting improvements$

VMI'S POTENTIAL PROBLEMS

Successful VMI programs depend on several critical factors% some of which are not immediately o vious$ )his has led to much confusion in the distri ution and retail industries% as suppliers and uyers have sought to implement VMI as the newest improvement to their e'isting systems$ VMI% while a logical outgrowth of 02I% 0fficient Consumer Kesponse "0CK#% Category Management "CM# and other programs% is &ualitatively different$ VMI depends upon the availa ility of solid and comprehensive consumer data "34S#$ Aithout such -live- information% the enefits of VMI egin to ecome elusive$ )he mfg!vend must understand the true nature of 34S data and how the dist!ret is using the stoc( that is ordered$ Ahile previously it was sufficient to (now that M num er of units were ordered% under VMI% the supplier needs to (now whether those units were eing inventoried "and for how long#% whether they were special orders% if they were ordered *ust to create full truc( loads% the num er of end users the units were going to% and so on$ Moreover% efficient inventory management and production scheduling re&uires close communication regarding promotions% seasonal variation% and new product introductions and selling incentives that may impact the a ility to forecast accurately$ )hus% e'ceptions communication must also e incorporated eyond the automated nature of data transfer under VMI$ Close supply chain communication is typically est addressed through routine and ad.hoc conference calls% video conferencing% and email systems$

Pro!le's "it VMI

Ahat ma(es VMI different from 02I and its other incarnations is that it passes control of the supply chain as far up the supply chain as possi le to support production pooling and inventory minimi+ation$ )hus% VMI should only e implemented in cases where the mfg!vend can forecast demand more accurately than the dist!ret$ 1s pointed out earlier% however% the competency to forecast and determine order levels is a learned capa ility$ )his indicates that supply chain partners should decide strategically who should hold such responsi ility% and then let that entity develop the competency$ Ma(ing inaccurate decisions in this area can lead to more pro lems$ 1s well% change must ecome &uic(ly adopted as -twea(ing- will ecome the norm not the e'ception$ Clearly% there are industries where the vagaries of consumer demand% local conditions or mar(et si+e dictate that the dist!ret should retain control of inventory management$ )his was the case with K. Mart% which after reducing the num er of vendors it wor(ed with and implementing VMI% discovered that its own uyers could do a etter *o of forecasting consumer demand in certain circumstances$ Some mar(et conditions do not ma(e VMI the est solution and a tailored!hy rid approaches need to e e'plored$ Specifically% the -silver ullet- approach will lead to pro lems if organi+ations accept VMI as an end.all solution$ 4ne &uestion that could not e resolved in reviewing the activities of many VMI programs is for what type of products VMI will and will not wor($ )his is a comple' &uestion where high volume% high turn items% li(e disposa le diapers% are popular candidates ecause they are low hanging fruit% while - est of reed- organi+ations have had success in other product types$ AalMart and 3NG have had a VMI program together for over ten years to manage the inventory and production of disposa le diapers% with great success@ turns dou led% AalMarts6 operating costs fell% and 3NG6s mar(et share grew " ecause AalMart gave it preferred shelf space#$ /owever% the opinion that non.volatile% low.turn

Vendor Managed Inventory

products would also enefit was also e'pressed% and none of the reported failures revolved around the type of product included in the programs$ )his may indicate an appropriate starting point to chose mfg!vends that have capa ilities ut also that produce such products$ 1dditionally% the answer depends on a num er of varia les that need to including@ e considered%

Ahat percent of their total volume do the VMI vendors sell through the dist!retB Ahat capa ilities do the vendors have in the area of forecasting or retail inventory managementB /ow fle'i le will the system e in the event of re&uired changes and modiicationsB Aill there e minimum volume or e'clusivity re&uirementsB Ahat product items are eing consideredB

1nother% more fundamental% pro lem with ma(ing vendors responsi le for retailers6 inventories is the fact that mfg!vends traditionally want to push product "i$e$% ma'imi+e inventory#% while retailers want to minimi+e inventory "i$e$% optimi+e sales#$ 4vercoming this dichotomy re&uires trust that oth parties are see(ing long term profita ility$ )he dist!ret should also assure itself that the interests of the mfg!vend salespeople are aligned with its own$ 0lements that need to e considered include@ /ow will the mfg!vends6 salespeople e compensatedB /ow will special pricing and promotions e handledB /ow will the enefits of VMI e splitB Ahat dist!ret sales and volume data should e (ept confidentialB Ahat are the mfg!vends6 other channelsB

1s distri ution systems ecome more sophisticated% the mechanical aspects of providing outstanding service..whether its ne't day delivery or access to a road networ( of manufacturers..will ecome more accessi le to all firms$ Service% therefore% from a distri ution aspect% may not translate into a sustaina le competitive advantage% however (nowing which products% in what &uantities% and where to store them% may e$

OUTLOOK AN !UTURE O! VMI

Logistics e'perts have recently pu lished the results of the annual logistics survey; that shows the acceleration of trends towards cycle time compression% reduced inventory% increased inventory velocity and greater use of 02I$ 1ccording to these researchers% more industries are paying closer attention to supply chain management$ )he survey results show that information technology and supply.chain management will most affect the future growth and development of logistics$ )he results of the survey forecast an increase in inventory turns% which survey respondents said will rise from >:E to ;:E y the year 9:::$ )hey also show that pooling of shipments is re.emerging as a Logistics strategy ",;$9E . 6=;% ,<$8E . 6=? and 9<$DE .9:::#$ )his implies that companies are ecoming increasingly competitive in determining what inventory to carry while offering &uic(er and more customi+ed service$ 1ccording to LaLonde% this can e attri uted directly to the application of VMI% which will increase from ;E of in ound shipments6$ in 6=; to ,=E y the year 9:::$
Cernard 7$ LaLonde performs a survey of 9:: chief logistics officers at ma*or corporations in con*unction with 4hio State University$ LaLonde was the former head of 4hio State6s transportation and logistics program and is now a professor emeritus$
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Vendor Managed Inventory

1ccording to another survey released y the International Mass Ketail 1ssociation "IMK1#% VMI programs will grow su stantially in the near future$ D 4ver ?:E of hard goods and almost ;:E of soft goods are now under replenishment programs managed y retailers$ )he survey pro*ects very little growth eyond these levels$ 4n the other hand% respondents mentioned that VMI programs are intended to grow within their organi+ations from insignificant levels today to ,:E of volume in the ne't three years for hard goods and a out <E for soft goods$

Is VMI *ust a logistics fad or is it a trend in supply+c ain 'anage'ent,

It can e argued that VMI is very similar to Continuous Keplenishment "CK#$ )he ma*or difference etween CK and VMI is that under VMI the mfg!vend is in charge of what to ship and when to ship it$ In a sense% VMI can e considered the ne't step after CK in the process towards an integrated supply chain$ Ae can then predict VMI transforming into Consignment Selling "CS# approaches and then theoretically the elimination of intermediary channels in support of direct selling "see 5igure ,#$ Conce tual *!olution o" +n!entory $anage%ent
4wner Managed Inventory Consignment Selling 2irect Selling

CK

VMI

Figure CS is similar to VMI% ut differs in one asic area$ In VMI% the retailer still owns the inventory and the manufacturer simply manages it$ CS can e considered the ne't step "after VMI#% where the manufacturer owns the inventory and the retailer charges a percentage for providing shelf space and customers$ CS has not een tried at full scale at the moment$ )he mass merchants "e$g$ AalMart# could e the first to convert from a VMI system with 3NG to CS$ )his might change the roles of the manufacturer and the retailer$ )he ne't step in the conceptual evolution could then e direct selling$ Under direct selling% the manufacturer would ta(e charge of the total vertical chain$ )hey would not only have the 34S information% ut would also have control over the channel flows$ ? )his implies that in the long run mfg!vends could ecome more powerful than any of the other supply chain participants$ )his emphasi+es why a strategic alliance is crucial for the success of any trust ased relationships such as VMI$ Sharing information and distri uting the margins e&uita ly ased on the distri ution flows performed y each mem er may e a good theoretical approach$ Keality shows a different trend$ 1s manufacturers perform more roles in the supply chain it is predicted that they will egin to see( out additional margins to cover these new costs$ 1s a result% they may chose to ypass e'isting channel arrangements in an effort to capture a larger piece of the pie$ 1n e'treme scenario eliminates the product flow through distri utors and retailers% where manufacturers would sell their products directly to a new partner@ the end users through the Internet$ In essence% the Internet would serve as the live
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)o order a copy of this report contact IMK1 ,<:: North Moore St$ Suite 99D:% 1rlington% V1 999:= "<:># 8;,.9>::$ 1ccording to Louis A$ Stern..Mar(eting Channels@ 1 flow in a distri ution channel is a set of functions "product ownership% financing% ordering% payment# performed y the different channel mem ers$ In the distri ution of any product% the more one mem er is involved in the channel flows the lower the margin to the other mem ers in the same supply chain$
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Vendor Managed Inventory

communications tool "02I lets say# with millions of channel partners$ )his approach is used in Singapore for individuals purchasing cars from /onda$ 0ssentially% the -auto.dealer- has een pushed out of the picture$ Limitations% of course% will impact which products this model would apply to% ut it nevertheless indicates a direction that technology will allow aggressive manufactures to move$ )he previous arguments ac(s up why VMI should not e solely e viewed as a cost reduction method for one of the players in the supply chain$ It should% rather% e viewed as a tool to successfully manage the whole supply chain% reduce costs% provide greater value to the consumer% and spread savings to all participants$ Cy forming alliances with partners early% long term via ility is greatly enhanced under e'trapolations of future uses of technology including the Internet$ Most li(ely% VMI will not dominate all logistics thought and practice$ Kather% the concept of -tailored logistics strategy- which incorporates only the tenets of VMI!02I that apply to an organi+ations uni&ue needs will e salient$ It is with a tailored approach that organi+ations will increase the pro a ility of success with VMI programs and related improvement techni&ues$ Under a tailored approach% however% organi+ations must e willing to em race change and ecome adept at proactively initiating improvement instead of reacting to mar(et conditions$ /istorically% it is the mar(et leaders and innovators that have prevailed over the ups and downs of mar(et conditions$ )hose that were followers have largely fallen y the wayside$

Bi"#iogr$%h&
,$ 9$ >$ ;$ D$ ?$ <$ 8$ =$ ,:$ ,,$ ,9$ ,>$ -3ushing the Limits of VMI$- Stores% pp$@ ;9.;;% March ,==D$ -State of a New 1rt$- Manufacturing Systems "Master the Supply.Change Challenge Supplement#% pp$@ 9.,:% 1ugust ,==D$ -0volution in 02I$- I id% pp$ 99.98$ -VMI Confa 0'amines Value.1dded Services$- 2iscount Store News% pp$ >;% May ,% ,==D$ -5low.through 2C Lields Savings for 5red Meyer$- Chain Store 0'ecutive% pp$ ?;.??% 4cto er ,==D$ -Implementing Vendor Managed Inventory..1 Case Study$- Chain Store 0'ecutive% pp$ =;% Novem er ,==D$ -Spartan 3ulls the 3lug on VMI$- 3rogressive Grocer% pp$ ?;.?D% Novem er ,==D$ -Manage Inventory% 4wn Information$- )ransportation and 2istri ution% pp$ D;.8% May ,==?$ /ow 3anduit 2id It$- 1merican 2emographics% pp$ ;.% March!1pril ,==?$ 2emand Management and Ceyond$- Manufacturing Systems% pp$ 9.,;% 7une ,==?$ )here 1re No Magic Cullets$- 5ro+en 5ood 1ge% pp$ ,% 9;% 1ugust ,==?$ It6s 1ll 1 out Lead )ime$- 1pparel Industry Maga+ine% pp$ ,=.9:% 1ugust ,==?$ -Glo al Crief on Vendor Managed Inventory-% K3MG% http@!!www$(pmg$ca!logistics% 1ugust ,==?