Determinants of successful vendor managed inventory relationships in oligopoly industries

Abstract

Purpose – To identify the key determinants of successful vendor managed inventory (VMI) and strategic supply chain relationships for industries characterised by oligopolistic competition. Design/methodology/approach – The study used action research in the New Zealand (NZ) food industry supported by a literature review, triangulation and case studies from other industries and countries. Findings – Seven key industry-level factors impacting the success of VMI and strategic supply chain relationships were identified. These were integrated into a step-wise framework that provides a path for practitioners to follow when establishing VMI and strategic supply chain relationships in the NZ food industry. Research limitations/implications – This research was conducted using action research in the NZ food industry; hence, the research findings may need to be modified and further adapted before applying to other, less concentrated, industries. Practical implications – A step-wise framework provides a path for practitioners to follow when establishing VMI and strategic supply chain relationships in the NZ food industry. Detailed practical guidelines are provided for practitioners who wish to improve the profitability of their supply chain. Originality/value – The key outcome was a working model that identifies the key determinants of successful VMI and strategic supply chain relationships in the NZ food industry, at an industry-level. A secondary outcome was the contribution to knowledge from an action research perspective.