This thesis first describes the inventory problem that DEPAI faucet company æ¢ multinational faucet manufacturer who is operating in China encountered. Starting from this point, this thesis describes in detail all aspects related to inventory management, such as incorrect sales forecast, long supply lead time etc. This thesis also describes this company抯 ERP system as well as the improvement this company抯 managers have made on the inventory issue. The aforementioned is the case part of this thesis that tries to present the original operation status of this company. How to thoroughly analyze the inventory bugs as well as to provide possible solutions to these bugs are the purpose of the case study part of this thesis. This part includes the following three aspects: Firstly, through analyzing the conflicting objectives and missions that different departments within this company hold, this thesis points out that the organization structure of this company has influenced the operation of the company including inventory control. This thesis utilizes the organization behavior theory of mechanistic and organic organization structure to propose the reorganization direction for this company. This thesis also suggests building mission teams to adapt itself to the challenges during the globalization. Secondly, forecast mistake is a significant cause to inventory problem. A good forecast means accurately mastering the direction of future based on limited history information and other resource within this company. Through analyzing in detail two forecast methods-the judging forecast method and statistic forecast method, the conclusion here is, if we could combine these two methods properly and involve all related parties within this company, we would get a good forecast result. As an example, this thesis provides a method to do DEPAI抯 annual forecast. Thirdly, ERP system provides a sharp tool to manage the inventory. Through analyzing the relationship between inventory control and ERP system (especially the core of ERP-MRP), this thesis points out the direction to improve the inventory control as well as the whole enterprise抯 operation, such as reinforcing local sourcing, establishing supply chain management system, improving the management foundation status etc.
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