Vendor Managed Inventory in Wood Processing Industries – a Case Study

Manfred Gronalt and Peter Rauch

Gronalt, M. & Rauch, P. 2008. Vendor managed inventory in wood processing industries –  a case study. Silva Fennica 42(1): 101–114.

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Solid structure timber (SST) is an important building material in the wood construction business, in which its production volume is largely related to that respective business.

Due to the large variability in the demand and seasonal factors, SST producers’ inventories are likely to be simultaneously overstocked for one type of timber and out of stock of another.

An inventory policy that ensures a high service level and relatively low stocks is required. In the present paper, we propose the vendor managed inventory (VMI) approach for controlling the stock of deals that are produced at a sawmill and delivered as raw material for SST-production.

We evaluate two VMI implementations against the actual inventory management for three different market scenarios.

Furthermore, we layout the necessities for reconfiguring the business processes, and subsequently set up an organisational framework within VMI, which is indeed applicable in this segment of the woodworking industry. In our application background, VMI as an inventory control system is able to reduce the overall raw material stock by more than 37% by simultaneously increasing the SST service level.

Keywords building materials, service level, solid structure timber, SST, wood construction

Addresses BOKU – University of Natural Resources and Applied Life Sciences, Feistmantelstr. 4, 1180 Vienna, Austria E-mail Địa chỉ email này đã được bảo vệ từ spam bots, bạn cần kích hoạt Javascript để xem nó. Received 12 March 2007 Revised 30 October 2007 Accepted 12 November 2007 Available at http://www.metla.fi/silvafennica/full/sf42/sf421101.pdf