Excerpt from Term Paper:

......Additional benefits of adopting an aggressive state-of-the-art VMI system include the following, which are defined by Askegar and Suleski (2) in table 1 of their landmark research study on the topic. The ability of manufacturers and distribution companies alike to increase their level of segmentation to customer needs and requirements is immediately evident in companies who achieve best-in-class performance on VMI. This higher level of performance translates into an above-average level of Return on Assets (ROA) and also a higher level of performance on Return on Invested Capital (ROIC) which is a critical measure of how well warehouse, shipping and fulfillment operations are being utilized in conjunction with VMI workflows. Secondly, these best-in-class companies who are relying on VMI as a competitive advantage also are better able to manage significant shifts in demand management emanating from their many distribution and selling channels. A natural progression for many of these manufacturers who have attained best practices is to also pursue a combined sales and operations planning (S&OP) process workflow with their largest suppliers and customers. In effect these manufacturers and distribution companies who have VMI-based processes running effectively throughout their supply chains are more capable of responding to wide variations on

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