The use of VMI to manage inventory in the Brazilian footwear industry: developing a model

Abstract

This study aims to offer a model to apply the VMI to manage purchasing and inventory in the Brazilian footwear industry as this industry’s is inserted in a rising product diversity environment, with shorter product lifecycle while facing heavy, international competitive pressures. The model that is being proposed is also related to establishing minimum inventory levels and the ideal inventory replenishment cycle for industrial operations, and it also classifies materials according to their financial impact and to how critical their provision is. This research, which is defined as an exploratory and qualitative one, addresses a case study of a Brazilian footwear company to gather fundamental information associated with operations history, strategic operational characteristics in the purchasing area, and purchasing management systems, all performed by means of an in-depth interview. When data was analyzed, it showed that among the various materials used by a footwear company, the use of VMI would be needed for materials that were classified as being non-critical components and competitive components, that is, those with a low degree of uncertainty regarding to offer and both high and low financial impact, respectively.

Keywords

• VMI.
• Inventory management
• Purchasing management
• Replenishment cycle
• Minimum inventory
• Footwear industry.