Vendor-managed inventory (VMI)
Employs the same principles as those of JIT inventory, however, the responsibilities of managing inventory is placed with the supplier in a supplier / organization relationship. Vendor-managed inventory (VMI) is a family of business models where the buyer of a product (business) provides certain information to a supplier of that product and the supplier takes full responsibility for maintaining an agreed inventory of the material. Under VMI, instead of the organization monitoring its inventory for the purpose of triggering replenishment orders, the supplier assumes responsibility for these activities. The organization wants the supplier to plan its inventory. In the past, many suppliers operated vendor-stocking…show more content… Well known as just-in-time production or the Toyota production system (TPS) is a methodology aimed primarily at reducing flow times within production as well as response times from suppliers and to organizations. Philosophy appears to be at the core of Japanese production management and productivity improvement. JIT is more than just a production and inventory planning and control system analogous to the well-known material requirements planning (MRP) systems. JIT pervades all aspects of the production and inventory flow process, covering not only the work-in-process (WIP) inventories (parts), but also, in the forward direction, the flow of finished goods from manufacturing to distribution centres, and, in the backward direction, the flow from…show more content… It is a disciplined approach and strategy to achieve significant continuing improvements in performance (the overall productivity and quality, not just product quality, but in terms of the needs of the organization, and the work life of the employees), through respect for people, and elimination of all sources of waste (i.e. of all non-value adding operations and resources). In the narrow sense, JIT refers to the production and delivery of only the necessary quality parts in the right quantity, at the necessary place, just-in-time (ideally) which requires total employee involvement and team work. Theoretical JIT or zero inventories will never occur. However, the resolution of the underlying problems in the process of approaching JIT as an ideal will realize significant