Effectiveness of Vendor Managed Inventory - VMI: A Study Applied in a Mining Company

Abstract

The large mining companies usually outsource the blasting service. There are two options regarding the management of the stocks of the explosives: first, the mining company management; second using Vendor Managed Inventory [VMI], which means that the supplier responsible for the management of the stock and all the logistics of delivery of the material. The present work has the objective of studying the effectiveness of this VMI in a supplier of a transnational mining company. Logistics costs are accounted for the period from January to September 2018. They are compared to the cost that the miner would have if the material requests were made on their account. The VMI in this mining company is very effective with a total saving of BRL 676.801,92 concerning logistics and BRL 7,356,295.36 about inventories. Furthermore, it was identified that there was no supply disruption, the stocks were in equilibrium according to the maximum and minimum limits and there was a low obsolescence percentage of products.