Your company is experiencing a drop in customer service ratings. Recently products haven't been delivered to customers on time, or have been delivered to incorrect addresses. Your company has also experienced a dramatic increase in inventory costs and revenue loss. Your department head, Jamie, says the solution to this would be to implement a supply chain management system; however, the head of another department, Kiley, insists that this is indicative of the bullwhip effect and the company just needs to adopt the pull model. How would you evaluate this situation?

a. Neither are correct. Your company is experiencing friction, as evidenced by the problems with delivery and increased inventory costs and revenue loss. What your company needs to do is implement vertical integration, which can reduce uncertainty and risks by decreasing inventory levels and cycle times, while improving business processes such as delivery by improving the quality of information flow and making the transfer and processing of information easier for users.

b. Neither are correct. Your company is experiencing friction, as evidenced by the problems with delivery and increased inventory costs and revenue loss. What your company needs to do is implement the push method, which can reduce uncertainty and risks by decreasing inventory levels and cycle times, while improving business processes such as delivery by improving the quality of information flow and making the transfer and processing of information easier for users.

c. Jamie is correct. Your company is experiencing friction, as evidenced by the problems with delivery and increased inventory costs and revenue loss. Implementing SCM systems is one way to significantly decrease friction in a supply chain. By implementing an SCM system, your company can reduce uncertainty and risks by decreasing inventory levels and cycle times, while improving business processes such as delivery by improving the quality of information flow and making the transfer and processing of information easier for users.

d. Kiley is correct. Your company is experiencing the bullwhip effect, as evidenced by the problems with delivery and increased inventory costs and revenue loss. By implementing the pull model, your company can reduce uncertainty and risks by decreasing inventory levels and cycle times, while improving business processes such as delivery by improving the quality of information flow and making the transfer and processing of information easier for users.