A Integrated Relation Ship Between Individual Companies Essay

3134 Words Mar 17th, 2015 null Page
1. Introduction
Under the globalisation and very integrated relation ship between individual companies in amost all industries, more and more companies adopted new business models which focus on their core competitiveness, while outsource the less important operations and services to third parties. In manufacturing, this means that companies are changing themselves from single plants into domestic and international contract manufacturer. Under such circumstance, sourcing from suppliers from all over the world can be regularly seen in these days. As the consequence of which, the supply chain has lengthened and grown more complex (Vitasek, Manrodt, Abbott, 2005). Thus, supply chain in nowadays are facing even more challenges ever. To be more specific, demand management is a tough task today. Outstandingly, bullwhip effect and snowball effect are main problem of demand management which lead to overproduction. Bullwhip effect is an overreaction of actual demand, while snowball effect is created by incorrect demand forecasting (Schniederjans, Schniederjans and Schniederjans, 2010). Moreover, due to the growing length of supply chain, the chances of supply chain disruption by major issues and disasters are becoming greater in number.

Under such background, firms, aim at becoming world-class business performance, are seeking to synchronise production with actual demand, more reliable partners, better customer service level, and more flexibility (Vitasek, Manrodt, Abbott, 2005).…

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