Post-implementation analysis: dependence and trust in VMI context
International Journal of Physical Distribution & Logistics Management
ISSN: 0960-0035
Article publication date: 30 May 2018
Issue publication date: 13 August 2018
Abstract
Purpose
More than two decades long technological improvements in information sharing have not yet ensured a flawless execution of vendor managed inventory (VMI) and left interested parties wondering about the reasons of poor results. Although VMI is a collaborative tool, the relational factors in a VMI setting have not received enough attention due to challenges in obtaining relational buyer-supplier data in addition to extant focus on analytical approaches. The purpose of this paper is to investigate post-implementation relational factors in order to extract relevant insights.
Design/methodology/approach
Accounting for the duration of the VMI relationship, the authors focus on two dimensions of VMI often ignored post-implementation: dependence of the buyer on the VMI-supplier and trust of the buyer in the VMI-supplier. Cross-sectional data were collected using a survey collected from distributors mostly in auto and electrical supply industries, which have their inventories managed by manufacturers through VMI arrangements. The sample was obtained from a leading third-party VMI-platform service provider that serves thousands of distributor-manufacturer locations with billions of dollars in sales orders. Multiple ordinary least squares regression has been used to test the hypotheses.
Findings
This paper provides empirical support that in the post-implementation stage, longer VMI relationships are associated with higher distributor dependence on the manufacturer. In addition, too much dependence could actually hurt the distributor’s trust in the manufacturer.
Practical implications
The authors propose that distributors maintain some of the purchasing and inventory management skills in house to limit their dependencies on the manufacturers. Manufacturers should also invest in trust-building activities, such as regular communications with distributors.
Originality/value
This is the first study providing empirical evidence on the positive association between length of VMI relationship and buyer dependence on the supplier, and curvilinear dependence-trust link in a post-implementation VMI context.
Keywords
Citation
Yalcin, M.G., Özpolat, K. and Schniederjans, D.G. (2018), "Post-implementation analysis: dependence and trust in VMI context", International Journal of Physical Distribution & Logistics Management, Vol. 48 No. 7, pp. 724-740. https://doi.org/10.1108/IJPDLM-09-2017-0294
Publisher
:Emerald Publishing Limited
Copyright © 2018, Emerald Publishing Limited