Tesco has rolled out projects for vendor managed inventory with 11 suppliers across categories that range from home entertainment to soft drinks.
VMI suppliers raise their own purchase orders based on sales and stock data supplied by the retailer. This is designed to reduce buffer stock in the supply chain and help suppliers plan production more efficiently and optimise their transport.
Tesco food supply director Joe Dybell said: “For the companies that are involved it is very successful because it integrates one of the supplier team into the Tesco team for planning and activity purposes.
“During the summer of 2003 - the hottest summer for 45 years - a soft drinks VMI supplier delivered a very high service level for soft drinks.
“By contrast, the overall soft drinks availability was much lower.
“The vendor managed inventory team delivered additional orders overnight, on short order lead time.”

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