Sustainable Growth through Network Optimization

1. Sustainable Growth through Network Optimization AfiefBaasir Botao Shao Hery Sofiaji PengyuZhai Team Name: Guerilla Consulting

2. Team Overview BotaoShao Botao Shao AfiefBaasir Hery Sofiaji PengyuZhai • MSIA of 2014 • MSHRM of 2014 • MBA of 2015 • MBA of 2014

3. Agenda Botao Shao

4. Current Condition of EatonBotao Shao Condition & Challenges Operation Analysis Future Look Recommendation Q & A

5. Key Challenges Botao Shao Condition & Challenges Operation Analysis Future Look Recommendation Q & A

6. Operation Analysis AfiefBaasir • Air shipment mostly occur from west coast CMSC Order by Premium Shipment • SF & LA contribute the biggest portion of air shipment in the west coast • Dallas DBN does not overcome the air shipment problem Condition & Challenges Operation Analysis Future Look Recommendation Q & A

7. Operation Analysis AfiefBaasir • There are a huge different between the two warehouse capacity Order by Source W34 (SC) hasabout 7 times bigger capacity compared to W87 (CA) Condition & Challenges Operation Analysis Future Look Recommendation Q & A

8. Operation Analysis AfiefBaasir • Enormous differences between air and ground shipping cost Condition & Challenges Operation Analysis Future Look Recommendation Q & A

9. Operation Analysis AfiefBaasir LA offer lowest distance to other CMSC in west coast Condition & Challenges Operation Analysis Future Look Recommendation Q & A

10. Operation Analysis AfiefBaasir • Change into ground shipping would led into significant cost reduction Assumption if all item shipped by ground in west coast: Condition & Challenges Operation Analysis Future Look Recommendation Q & A

11. CMSC Performance Comparison Hery Sofiaji Condition & Challenges Operation Analysis Future Look Recommendation Q & A

12. Eaton’s Options Hery Sofiaji Options Benefits Drawbacks Increases responsiveness to demand’s change Improve inventory turnover Enhance market presence Can consolidate supplier orders Shorten distance of supply to some CSMC site Reduce high utilization of W34 & W87 The least expensive investment and costs Can support local area Need a lot of investments The facility will need a lot of costs to be operated Less responsive to support market fluctuation from farther location Can not increase responsiveness to fluctuation of customer demand Build new CMSC site Build a major warehouse Extending plant storage at CSMC Condition & Challenges Operation Analysis Future Look Recommendation Q & A

13. Valuating the options Hery Sofiaji Responsive- ness Build new CSMC High Extend plant storage of CMSC Build new warehouse Low Cost Condition & Challenges Operation Analysis Future Look Recommendation Q & A High Low

14. Building a new warehouses Hery Sofiaji Condition & Challenges Operation Analysis Future Look Recommendation Q & A

15. RecommendationPengyu (Peter) Zhai Short-term Objectives Leverage the performance between the west and the east Improve the existing supply chain network Condition & Challenges Operation Analysis Future Look Recommendation Q & A

16. RecommendationPengyu (Peter) Zhai From inventory level perspective, expand capacity of plant storage in LA, Houston, and Dallas. From future developmental perspective, also expand capacity of plant storage in LA, Houston, and Dallas. From transportation optimization perspective, build warehouse in Los Angeles New CMSCs are costly, but suitable for long term expansion Condition & Challenges Operation Analysis Future Look Recommendation Q & A

17. RecommendationPengyu (Peter) Zhai Long-term Objectives Develop a sustainable network for future growth within the entire distribution system Promote Eaton Power Distribution Systems at every medium to large size city Condition & Challenges Operation Analysis Future Look Recommendation Q & A

18. RecommendationPengyu (Peter) Zhai Condition & Challenges Operation Analysis Future Look Recommendation Q & A

19. RecommendationPengyu (Peter) Zhai • Staff Training • Future Demand Forecasting Condition & Challenges Operation Analysis Future Look Recommendation Q & A

20. Q & A Thank you! Guerilla Consulting Condition & Challenges Operation Analysis Future Look Recommendation Q & A