Analysis of Vendor Managed Inventory Implementation in Collaborative Supply Chain Using Simulation Method

Abstract

In this competitive era, supply chain becomes one of the important aspects in industry. Industries have to respond faster to uncertain customer needs through faster product development and shorter delivery time. The uncertain demand makes manufacturer difficult to predict the production quantity and inventory control. Thus, to achieve a matching demand with supply, manufacturer and its suppliers need to collaborate in the supply chain which leads to the emergence of collaborative supply chain. Collaborative supply chain is the alliance of two or more independent companies to achieve greater success. It is considered better than conducted the processes independently. One of the examples of collaborative supply chain is the implementation of vendor managed inventory. Vendor managed inventory in collaborative supply chain could give some benefits for supplier and manufacturer such as lower inventory which leads to cost minimizing and profit increasing. This study performs an analysis of vendor amanged inventory in collaborative supply chain using Spreadsheet Simulation method for PT. Rakabu Sejahtera with its suppliers. The alternatives of collaborative supply chain used as the consideration to conduct the simulation are information sharing and decision synchronization. In this study, there are 6 scenarios built for the simulation. The result shows that the best scenario for the implementation of vendor managed inventory in collaborative supply chain is Scenario 6. Scenario 6 is the suppliers deliver raw material to the PT. Rakabu Sejahtera only when the inventory level reach the re-order point as much as safety stock amount added by demand on the day it reached the re-order point. The result of Scenario 6 shows that the supply chain cost is reduced as much as 84.32%.