Author: Or, Suk-fun
Title: Adoption of vendor managed inventory systems in the aviation industry : an empirical analysis
Year: 2004
Subject: Hong Kong Polytechnic University -- Dissertations
Aircraft industry -- Inventory control
Manufacturing resource planning -- Case studies
Business logistics -- Case studies
Department: Graduate School of Business
Department of Logistics
Pages: 53, viii, 6 leaves ; 30 cm
Language: English
Abstract: Traditionally airlines and maintenance and repair organizations (MROs) invest considerably in spares to keep the aircrafts flying. In recent years, the concept of Vendor Management Inventory (VMI) has gained considerable recognition in the aviation industry and even giants in the industry like Boeing has attempted to capture the after market spares support programs through promoting its "Integrated Materials Management" (IMM) for its customers. Under the program, Boeing proposes to buyback airlines' inventories and manages airlines' supply chain for airframe spare parts and commits to service level as specified by the airlines. It is anticipated that the number of VMI programs will increase in the coming years as more operators and MROs are increasingly concerned about maintaining their core competences to transport passengers and freight, to maintain the aircrafts and to market these services. The trend to outsource spares support programs to inventory management companies will continue into the next decade. As VMI programs are becoming more popular in the airline industry, this paper seeks to have a better understanding of the drivers behind the decision to outsource VMI programs, and attempts to survey the perceived barriers and benefits of the adoption of VMI in the industry. The aims of the research are to investigate the use of VMI to improve supply chain management and to identify which factors are important to the adoption of VMI in the aviation industry. A model for the adoption of VMI is proposed that consists of the following three major factors: organizational context, perceived VMI benefits, perceived VMI barriers to the adoption of VMI. The study was conducted using a survey sent to 500 procurement professionals in the aviation industry. A total of 93 usable surveys were returned. The results from the survey are analyzed and discussed in this paper. The information presented in this paper aims to enable procurement practitioners to have a better understanding of the current status of the use of VMI in the aviation industry.
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