Study of vendor‐managed inventory practices in Indian industries

Abstract

Purpose In the global economy, vendor‐managed inventory (VMI) is gradually becoming an important element of supply chain management strategy of organizations. Recently, Indian industries, both large and small, have started adopting VMI for their supply chains. The purpose of this paper is to investigate apparent differences among large and small industries in terms of objectives, drivers, obstacles and impacts of VMI in Indian context. Design/methodology/approach A survey was conducted to examine organizational objectives, strategic drivers, obstacles and affected operations pursuant to VMI adoption. By reviewing the literature, four hypotheses were formed and tested from the responses. Findings It is observed that both large and small industries in India have started adopting VMI for improving the business performance. Results clearly indicate that adoption factors are different in large and small industries. Originality/value The paper explores current practices with respect to VMI in Indian industries. The analysis would be useful for the developing VMI adoption strategies in Indian context.