• If an organisation is trying to reduce the amount of effort it puts into inventory control, one option is to leave the whole problem to someone else and use third parties. We have already seen that outsourcing parts of logistics can bring advantages, and one option is to use a third party to keep all stock.
• Another option is to have another organisation look after the stock control, without them actually holding the stock. Perhaps the most common arrangement of this kind is vendor managed inventory.
• The benefits of such arrangements are that the supplier can co-ordinate stocks over a wider area,use optimal inventory policies, organise transport more efficiently, increase integration in the supply chain, collect more information about demand patterns, and give a consistent customer service.
• The drawbacks include more reliance on a supplier who may have different objectives, less clear responsibility for stock, need for more sophisticated information systems, and less flexibility.
• If an organisation is trying to reduce the amount of effort it puts into inventory control, one option is to leave the whole problem to someone else and use third parties. We have already seen that outsourcing parts of logistics can bring advantages, and one option is to use a third party to keep all stock.• Another option is to have another organisation look after the stock control, without them actually holding the stock. Perhaps the most common arrangement of this kind is vendor managed inventory.• The benefits of such arrangements are that the supplier can co-ordinate stocks over a wider area,use optimal inventory policies, organise transport more efficiently, increase integration in the supply chain, collect more information about demand patterns, and give a consistent customer service.• The drawbacks include more reliance on a supplier who may have different objectives, less clear responsibility for stock, need for more sophisticated information systems, and less flexibility.
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