Vendor Managed Inventory A Successful Initiative

Jones, Ashley
June 2001
Logistics & Transport Focus;Jun2001, Vol. 3 Issue 5, p31
Trade Publication
This article describes the design, project management and implementation of a successful Vendor Managed Inventory initiative undertaken by the Nalco/Exxon Energy Chemicals in alliance with the BHP Petroleum. The four primary objectives of the group were to reduce operating cost by 25 percent, reduction of supply-chain complexity, one-party management, and system integrity. Through a series of site visits and data gathering, the initial phase of the project focused on understanding the existing supply chain. Following the launch in 1999, cost reductions in excess of 28 percent have been consistently delivered, with no interruptions to supply. This has been achieved by simply moving from a vertical to horizontal management structure. In monetary terms, it represents a saving of 300,000 dollars a year. Furthermore, intangible benefits have been numerous.


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