Study Of Distributor's Supply Operation Management Project Improvement For Company W

Company W is a leader in babe nutrition field,and aslo a global enterprise with over one hundred years history.The main product is infant formula milk powder.Company W's product has entered to China market from mid of 1980 s,and now becomes a leading brand in the market.The market share from 2014 till 2016 is no.1.All revenue is from supply to distributors.However,since the business expanding is too rapid,which makes company W has more distributors and retailers.The operational management for company W to collect retailers' demand forecast and to arrange supply for distributors has becoming more challenging.Company W has 30% annual growth rate of revenue from 2004 to 2014,and maintains stock level 0.5 in distributor's warehouse.However,in 2015,the stock level raised up to 2.5 at sudden.The warningless level up in stock brought company W a huge risk in finance side.The reason is becuase the supply amount from company W to distributor is much higher than the supply amount from distributor to retailer.The inbalance is due to mis-forecast to retailer's demand.If this inbalance keep going,it will result in serious bullwhip effect which create huge stock in upper stream.Company W will face a bigger risk.In order to find the root cause,this study will start to describe company W's operation management to distributors.In the meanwhile,the study will quote different reseachers' theory about bullwhip effect's cause and find solution for the problems.The cause of the problem is due to company W's targeting management error for distributors.The information exchange is under gating within the supply chain.Company W doesn't have a suitable inventory compensation mechanism and are unable to obtain retailer's order information.These three reasons are the causes to make stock level high.In order to solve the problem and provide solutions for company W,the study will refer to the tools and modelings from reseach of operation and supply chain management.There will be two solutions.First,to establish an ERP system internally in company W is to obtain retailer's demand data and to improve the information exchange process between departments in company W.At the same time,the system is equipped mathmatical modeling for demand forecast and equpipped Fixed-order quantity models for inventory compendation mechanism.Second,to establish an ERP platform called Order Center among company W,distributors,and retailers is to obtain retailer's order information from itself and to accurate distributor's offtake data.In the end,the study will use project management method to apply for the solution execution.The estimated outcome for company W is to avoid certain stock risk and give company W a way to increase their revenue.