• Journal of Distribution Science
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• v.13 no.3
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• pp.31-39
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• 2015

Purpose - Due to its potential to improve supply chain operations, supply chain collaboration has attracted significant attention from both academics and practitioners. This study focuses on VMI, in collaboration with consignment, and examines its impact on supply chain performance. Research design, data, and methodology - This study employs the analysis of mathematical models, formulated based on the proposed supply chain framework. Using numerical examples, it evaluates the performance of three supply chain systems: one including VMI and consignment, a consignment-only system, and a traditional system. Results - The combination of VMI and consignment produces greater supply chain benefits than the consignment-only and traditional systems. Whereas only the performance of the buyer improves with the consignment-only system, the system with VMI and consignment is beneficial to both the buyer and supplier. Conclusions - The results of this study reveal that the inclusion of the additional collaborative function of VMI makes consignment a better supply chain collaboration program. Future studies should examine issues regarding the testing of diverse collaboration programs and the building of a firm theoretical background.

• The Journal of Industrial Distribution & Business
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• v.12 no.5
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• pp.7-16
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• 2021

Purpose: This study intends to examine how VMI with consignment performs over time and find out its on-going impacts on the individual supply chain member's achievement. Research design, data, and methodology: This study formulates the mathematical model that represents two-stage supply chain system. By analyzing the numerical examples, this study compares VMI with consignment with the traditional system. Results: VMI with consignment eventually makes higher supply chain profit than the traditional system, even though it's early performance is poor. The influence of VMI with consignment on the performance of the supply chain member is distinct depending on the individual member and time. The consignment may not be helpful to increase the system profit, but it reduces the manufacturer's burden of costs. Conclusions: VMI with consignment improves the supply chain performance after all, and it still takes times until its benefit becomes fully realized. To be a successful collaboration program, VMI with consignment requires a carefully designed incentive scheme that provides the timely compensation to the individual supply chain members. This study also finds out that the consignment contract of this collaboration program plays a role of financially supporting the manufacturer at the early stage of its implementation.

• Journal of Distribution Science
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• v.14 no.4
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• pp.21-31
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• 2016

Purpose - This study examines how consignment and Vendor-Managed Inventory perform as supply chain collaboration programs. By using three key collaborative features, this study defines the collaboration programs and develops theoretical models of different supply chain systems. Research design, data and methodology - This study conducts sophisticated analysis on the supply chain systems by applying simulation modeling based on time-phased operations. The simulation model represents a two-stage supply chain system where a supplier sells a single item to a buyer, and it incorporates various operations. Results - In general, the simulation outcomes support that more advanced collaboration programs outperform less advanced ones. The analysis on the simulation outcomes identifies the significant value of information sharing in both collaboration programs. The specific conditions where the particular collaboration system outperforms the others are recognized. Conclusions - The outcome of this study supports that the supply chain system can improve its performance by having more collaborative features. This study provides business practitioners with guidelines to identify the circumstances that the specific collaboration program can fully exploit its advantages.