VMI — Whose Risk is this Anyway?
published: cw 16, 2005 in Supply Chain Management?Vendor-Managed Inventory (VMI), introduced by Kurt Solomon Associates in 1992, is perhaps the most widely known system for managing supply chains. Under VMI, the buyer authorizes the supplier?to manage the inventory of stock-keeping units (SKUs) at the buyer?s site(s) under agreed-upon parameters.
The buyer provides the supplier with sales and/or inventory-status information; and the supplier makes and implements decisions about replenishment quantities and timing. VMI provides the supplier with the opportunity to better manage its own production, inventory and transportation costs. In exchange, the buyer typically receives price discounts or improved terms of payment
This paper will deal with some of the insurance issues associated with this expanding business practice.
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