Dangerous distributor orders.docVIP

 PAGE \* MERGEFORMAT 11 ‘Dangerous’ distributor orders Overdue accounts receivable in the balance up to 50%, turnover number of days 151 days 266 days stock inventory, but 80% of more than 180 days of non-performing inventory, while the market selling product stock-out rate was 50%. For any run , this set of data mean that companies have to amp;quot;Live and Let Die.amp;quot; However, this is one of the Fortune 500 world’s largest cosmetics group of a branch (hereinafter referred to L Company) by the end of 2000 conditions. L company officially entered China in 1997 cosmetics market, marketing strategy, product updates and other fundamental operation simultaneously with the global market. The end of 2000 global consolidated statements show the company’s global operating profit rose by more than 3 consecutive years, 10%, which in the West of large multinational companies in mature industries is very rare. So what caused the company under the same conditions, the performance in the Chinese market so it is not satisfactory? After it, due to appear in, the Company sold too far in favoring the middle link in the supply chain - distributors, not the end of the supply chain - the final consumer links be achieved, so that the supply chain, resulting in accounts receivable deformities section in arrears, resulting in sales can not be realized in cash flow approach, the company’s resources have been a great waste. In addition, L orders the company as the distributor for the market demand, and accordingly to arrange the production, so that production and the real needs of end consumer market dislocation occurs, resulting in distortion of the manufacturer’s forecast, stock structure malformations. Aware of the seriousness of the company after the rectification carried out immediately, after a year’s effort in 2001 to the financial analysis of indicators has been significantly improved. Accounts receivable turnover days increased from 151 in the world is reduced to 86