An Analysis of The Effectiveness “Term of Consumption” System Implementation in PT XYZ

Abstract

As one of the largest retail company in Indonesia, PT XYZ is relying on their operational activities through a complex supply chain management system. To be able to survive and become a leading company, PT XYZ understands the importance to improve the competitive advantage of its supply chain by means of strategic alliances. VMI is one of the most popular strategic alliance’s concepts in the retail industry. For the retailer, VMI is transferring their responsibility of inventory management to the supplier. VMI partnership enables the supplier to decide regarding inventory replenishment for the retailer. To be able to adjust to the needs of the supplier, PT XYZ adapts the VMI system to a system called Term of Consumption (TOC).