Vendor Managed Inventory (VMI) model is an effective way to integrate resources in supply chain management, but many scholars believe that VMI is more conducive to the demand-side than to the supply-side. This paper chooses Panasonic Electric Work - Wanbao (Guangzhou) Co. Ltd. as an example, and analyzes the application of VMI in the supply chain management. By expounding the problems in the traditional inventory management, and evaluating the effectiveness of VMI, the author concludes that VMI is a win-win approach to the supply chain. VMI could reduce the overall inventory costs, and improve efficiency and service levels of the whole supply chain.
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