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| Thought Paper |
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Managing Demand using the VMI and Consignment Inventory Model |
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| Abstract |
In recent times, there has been an accelerating trend towards greater integration of supply chains for better demand and supply management. This is being driven by the need to respond quickly to the requirements of ever demanding customers and consumers. The focus clearly is shifting from streamlining individual manufacturing entities to eliminating inefficiency from complete supply chains.
As inventory is the lifeblood of supply chains, it is essential to properly manage this critical asset as it can drive revenue and efficiency for companies. Organizations have followed different strategies and models for optimizing inventory levels. Some significant strategies or practices for streamlining inventory along the supply chain include Lean manufacturing, JIT, Vendor Managed Inventory (VMI) and Value chain collaboration. This paper describes the benefits of VMI and the "Consignment" Inventory model, which is a distinctive flavor of VMI.
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