Vendor Managed Inventory in the Swedish Construction Industry Master’s Thesis in the Master Program of Design and Construction Project Management

In the construction sector wastes and problems concerning logistics and supply chain management are widely found, and they are some of the important interfering factors for improving efficiency and productivity within the sector. Vendor Managed Inventory (VMI) is a well developed and adapted approach for logistics and supply chain managements in other industries, such as automotive. This thesis is aiming to explore the capability of VMI adaptations in the Swedish construction sector. Semistructured interviews are executed to obtain practical supports for this research in addition to relevant theoretical frameworks. Interviewees from different parts of supply chains are chosen to obtain essential reflections and enhanced credibility of empirical findings. Construction companies are interested in trying the VMI approach with strategic item suppliers as they could gain more benefits; meanwhile, construction companies have negative opinions with non-critical item suppliers, since they are currently enjoying their role in the relationships with this type of suppliers. Suppliers are believed by the author to have great interests in implementing VMI; however, it is currently different for non-critical item suppliers to engage in the VMI partnerships for several reasons. In addition, for major construction companies, lessons could be learned from the infrastructure industry, since cooperation between infrastructure companies and internal suppliers are maximized and advanced technologies are widely utilized in projects. The author recognizes that logistics companies showed great interests in the VMI method, since VMI could potentially help companies to obtain more business and secure long-term cooperation. Moreover, VMI to has great possibility to solve logistics and supply chain management problems in the construction sector, because it has great abilities to reduce workload to project managers, improve the demand forecasting, and etc.. As a result of the thesis, VMI is believed to be applicable in the construction industry. However, at the current stage in some circumstance, VMI is several steps further in the renovation of logistics and supply chain management in the sector. In order to facilitate the successive adaptation of VMI in the construction industry, recommendations, such as starting VMI implementations with suppliers of standard and most frequent used building materials and providing generous investments on Electronic Data Interchange and Enterprise Resource Planning systems, are proposed.