<p>Abstract</p><p>Kongsberg Automotive (KA), a first- and second-tier supplier to some of the largest</p><p>automotive manufactures, has acknowledged the need to enhance their competitiveness</p><p>and to collaborate within the supply chain. In order to do this, KA must improve the</p><p>current business processes by establishing long term relationships with their suppliers.</p><p>Today, KA face a high level of inventory, which has resulted substantial amount of tied</p><p>up capital and inefficient processes. Therefore, this study will evaluate KA’s and three</p><p>chosen suppliers’ possibilities and the effects that a vendor managed inventory (VMI)</p><p>partnership will imply.</p><p>VMI is a concept within supply chain management, where the supplier is fully responsible</p><p>for managing the customer’s inventory level. To achieve this, the supplier is given</p><p>access to sensitive information of the customer’s inventory level and demand and can,</p><p>thereby, replenish the customer’s stock when needed. Although, some firms have embraced</p><p>the concept with success, others have retreated forcefully.</p><p>To fulfil the purpose of this study, we have done a broad literature review regarding</p><p>VMI and performance measurements, as well as, organisational structures and information</p><p>sharing in collaborative partnerships. Further, to better understand the implementation</p><p>and effects of VMI, a benchmarking study was made at Volvo Powertrain in</p><p>Skövde, an early VMI pioneer. In addition to the thorough study of KA’s processes,</p><p>field visits were made at the suppliers’ to visualize their material and information flow in</p><p>order to examine in what areas VMI would have an impact.</p><p>The conclusion of this study is that a VMI strategy, in supplement with a consignment</p><p>stock policy, is possible for KA. However, issues concerning responsibilities and ownership</p><p>have become apparent throughout the study that needs to be agreed upon. Further,</p><p>the study indicates that the benefits from a VMI implementation will be greater for KA,</p><p>than for the suppliers. Specifically, a reduction in inventory value can be attained by KA,</p><p>while the suppliers only can obtain minor improvements within the areas of inventory,</p><p>production, and order processing. On the other hand, the suppliers will face drawbacks,</p><p>mainly in their order processing, which will result in increased costs. However, we advice</p><p>KA to further discuss and test the VMI and consignment stock strategy in a pilot</p><p>project in order to find the right solution for the company and the suppliers.</p>
| Identifer | oai:union.ndltd.org:UPSALLA/oai:DiVA.org:hj-461 |
| Date | January 2006 |
| Creators | Nowak, Daniel, Nyman, Robert, Lundberg, Marie |
| Publisher | Jönköping University, Jönköping International Business School, Jönköping University, Jönköping International Business School, Jönköping University, Jönköping International Business School |
| Source Sets | DiVA Archive at Upsalla University |
| Language | English |
| Detected Language | English |
| Type | Student thesis, text |
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