This paper aims to address two questions: what kinds of benefits are realized from a vendor‐managed inventory (VMI) program (operational, i.e. efficiency related, vs strategic, i.e. sales related) and how the benefits are shared at the dyad level (suppliers vs buyers).
The paper uses an exploratory multiple case study with data from five operational VMI dyads, evaluating both buyer and supplier perspectives.
Three empirically grounded patterns of VMI are proposed. Five contextual inhibitors of VMI impacts are suggested.
The framework presented has been generated from a relatively small number of cases. Threats to external validity have been mitigated with case selection from multiple operational contexts and grounding findings in prior literature.
Using the conceptualization, potential VMI adopters can set more realistic and explicit implementation targets. The suggested contextual factors will help to design more appropriate VMI systems.
Past research on VMI can be mainly characterized by modeling/simulation approaches, focus on operational efficiency implications, and concern with impacts to buyers. In contrast, empirical studies on the actual impacts and dyad‐level reasons considering also the strategic (sales related) motivations for implementing VMI are few. This study contributes by suggesting how VMI is in some instances motivated not by bilateral interests to develop a supply chain, but by unilateral interests, with buyers searching for effortless purchasing, and suppliers for a means to lock in and secure sales.
