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Supply Chain Management at W Up Bottlery A Case Solution
| Solution Id | Length | Case Author | Case Publisher |
|---|---|---|---|
| 1114 | 538 Words (2 Pages) | Kamalini Ramdas | Darden School of Business : UV1285 |
A Word File
First of all, if the vendor managed inventory system is successfully implemented then the major change will occur in how the sales department operates i.e. the top management will have to change its mode from incentive-based to normal remuneration based as the company will be selling only the require amount of inventory to its distributors rather than forcing as much as possible depending upon the buying power of distributors. In addition to this, the operation will become more organized as compared to the current situation as the company will make an effort for getting greater control over its indirect distribution route, which is responsible for nearly 80% of total sales. The primary reason behind an attempt to get greater control would be to ensure a higher level of accuracy in the forecasting process, which is not possible unless the supply chain managers have access to ground level information i.e. sales of retail outlets. Moreover, another major change would be with respect to how the company views its distributors and retailers.
Following questions are answered in this case study solution
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How will the structure of, governance of, and behavior within the W’Up supply chain change, assuming successful VMI implementation? Why might VMI fail for the W’Up supply chain?
Case Analysis for Supply Chain Management at W Up Bottlery A
At present, distributors, retailers, and the company, all operate as separate entities prioritizing their own profit over another; however, with the implementation of vendor managed inventory system, all entities from the top i.e. the company to the bottom i.e. the retail outlet, or a small shop, etc. would become partners. Rather than aiming for personal profits, all of them will work together to ensure that minimum wastage takes place, no sales opportunity is lost due to stock-out, no excess inventory is maintained, and a high level of customer service is provided. So, a major implication of the vendor managed inventory system would be a change in the mindset of each entity, particularly of the company, for the purpose of providing higher value to its primary, secondary, and tertiary customers.
Despite the fact that vendor managed inventory system has done wonders for several organizations, around the world, it still poses a serious threat of failure to the W’Up supply chain because of the complicated supply chain network of the company. First of all, for the successful implementation of the vendor managed inventory system, the vendor has to have direct access to the live and exclusive sales update of its distributors and retailers so as to be able to provide the right inventory. Considering the fact that small shops have no internet access, it means they are out of limit for the W’Up bottlers. Now, if the company will try to get direct access to the distributors’ information they will have to convince distributors regarding the benefits of the Vendor Managed Inventory System; otherwise, the company will have a hard time getting accurate information. Lastly, by implementing Vendor Managed Inventory, one way or another, the role of the Sales team will get eliminated or reduced. Obviously, the sales team will make an all-out effort to ensure that this strategy does not get implemented, which might become the reason for the failure of vendor managed inventory system for the W’Up supply chain.
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