Research on the Role of SCM in China Dairy Firms

In this paper, we investigate supply chain management (SCM) in China dairy industry. The result shows that it can make enterprises cut the expenses and raise the efficiency by implementing of SCM. However, compared with other enterprises which do not implement SCM, those companies which have implemented SCM have not received the anticipated benefit. The reason is that those companies usually implement vertical integration before SCM. This practice normally saves the information cost while increasing the operation cost. It is very difficult to implement SCM system among domestic enterprises that have only business relationship. It is a new subject that the industry faces to implement the SCM by combining each related enterprises of the business together, based on the analysis of vertical integration suiting to enterprise’s own situation.