Sustainable Growth through Network Optimization Team 6 Dongfang Wu YosukeKomori Meng-iChou TatsukiIbuki

GSCMI 2013 Case Competition 2 Agenda  Root Cause Analysis  Improvement Goal  Short-term Operation  Long-term Operation  Summary Presenter: Dongfang Wu

GSCMI 2013 Case Competition 3 East Coast West Coast South Region Middle West Region Presenter: Dongfang Wu

GSCMI 2013 Case Competition 4 Root Cause Analysis  Performance Evaluation Operation Comparison Between CMSC in West and East. Presenter: Dongfang Wu CMSC in EastCMSC in West (using frequent freight transportation) Annual order value (thousand dollar) 46,05346,418 Annual sales (thousand dollar) 39,62340,609 Average DOH(days) Annual shortage ratio ( Transportation emergence) 4.91%10.1% SF:23.9%; LA: 10%; Fill rate94%88% Rate of ordering from internal suppliers86% Using assumed lead time for calculation.

GSCMI 2013 Case Competition 5  Product Shortage Analysis 18.3% 28% 72% Presenter: Dongfang Wu

GSCMI 2013 Case Competition 6 Order by Source Analysis Presenter: Dongfang Wu

GSCMI 2013 Case Competition 7 Improvement Goal  For Short-term Operation  CMSCs in West maintains the same inventory management level as in East.  For Long-term Operation  To ensure a sustainable growth. Current situation (using frequent freight transportation) Target Fill rate88%94% ROP (thousand dollar) 114,229242,573 SS (thousand dollar) 83,772149,098 DOH (days) Ending Inventory Level (thousand dollar) 858,154932,035 Presenter: Dongfang Wu Using assumed lead time for calculation.

GSCMI 2013 Case Competition 8 Short-term Operation Highly modular design Generic product manufacturing in plant Reduce uncertainties Postponement of Differentiation Presenter: Meng-I Chou

GSCMI 2013 Case Competition 9 Milk Run Presenter: Meng-I Chou

GSCMI 2013 Case Competition 10 Renting a Warehouse Reduce lead time Increase flexibility of LA and SF Fulfill customers demand Presenter: Meng-I Chou

GSCMI 2013 Case Competition 11 Long-term Operation  Build small warehouses such as DBN  Decrease shipping cost  Improve daily lead time between CMSCs and warehouses  Establish CMSCs near new small warehouses  Expand market  Improve customers’ response time Presenter: Tatsuki Ibuki

GSCMI 2013 Case Competition 12 Target Cities for New Warehouse Salt Lake City Chicago New Jersey Presenter: Tatsuki Ibuki

GSCMI 2013 Case Competition 13 Benefits of New Small Warehouses W34 W87 Salt Lake City Chicago New Jersey Shipping Cost Lead Time Presenter: Tatsuki Ibuki

GSCMI 2013 Case Competition 14 Benefits of New CMSCs W34 W87 Salt Lake City Minneapolis Kansas City Memphis New Orleans Albuquerque New CMSCs Chicago New Jersey Presenter: Tatsuki Ibuki

GSCMI 2013 Case Competition 15 Summary  Short-term Operation  Postponement of Differentiation  Milk-run  Forecast Improvement  Ordering System Revaluation (Kanban)  Long-term Operation  New Warehouses  Location  Salt Lake City  Chicago  New Jersey  Lower Shipping Cost  Shorter Lead Time  New CMSCs  Information System Presenter: Yosuke Komori

GSCMI 2013 Case Competition 16 Thank you!