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Team Rowland Presenter 1: Elizabeth Rowland (E.R.) Presenter 2: Juan Guerrero (J.G.) Presenter 3: Tarun Aggarwal (T.A.

Team Rowland Presenter 1: Elizabeth Rowland (E.R.) Presenter 2: Juan Guerrero (J.G.) Presenter 3: Tarun Aggarwal (T.A.) Presenter 4: Norihiko Hosokawa (N.H.). Six Sigma DMAIC Methodology (E.R). Implement. Implement. Eaton Corporation ( E.R) . Power m anagement company

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Team Rowland Presenter 1: Elizabeth Rowland (E.R.) Presenter 2: Juan Guerrero (J.G.) Presenter 3: Tarun Aggarwal (T.A.

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  1. Team Rowland Presenter 1: Elizabeth Rowland (E.R.) Presenter 2: Juan Guerrero (J.G.) Presenter 3: TarunAggarwal (T.A.) Presenter 4: Norihiko Hosokawa (N.H.)
  2. Six Sigma DMAIC Methodology (E.R) Implement Implement
  3. Eaton Corporation (E.R) Power management company 102,000 employees $22 billion sales in 2013 Customers in 175+ countries Four main business sectors Electrical, Aerospace, Vehicle, and Hydraulics
  4. Eaton Corporation: Sector of Focus(E.R) Power management company 102,000 employees $22 billion sales in 2013 Customers in 175+ countries Four main business sectors Electrical,Aerospace, Vehicle, and Hydraulics Customer Manufacturing Solutions Centers (CMSCs)
  5. Problem Definition (E.R) CMSCs must improve their supply chain network by: Reducing premium freight frequency Managing overall inventory CMSCs must increase their future growth sustainability
  6. Measurement (E.R)
  7. Measurement (E.R)
  8. Measurement (E.R) 6/9 9/13 WEST USA: High inventory levels and high premium shipped orders
  9. Analysis Part I: Transportation Cost (J.G) Sources CMSC
  10. Analysis Part I: Transportation Cost Short term (J.G) Sources: NC = Fayettville-Arden-Raleigh SC = Sumter-W34 LA = W87 Dallas = CDC&DBN * P.Rico & Others not included in analysis CMSC: SE = Atl-Ral-Orl NE = Bal-NJ-Cle-Har MW = Chi-StL S = Dal-Hou SW = SF-LA-Pho NW = Sea-Por W = Den
  11. Analysis Part I: Transportation Cost Short term J.G
  12. Analysis Part I: Transportation Cost Long term J.G
  13. Implementation & Control Part I (J.G) Recommendations SHORT-TERM RECOMMENDATIONS: Revise sourcing allocation Implement optimization models Identify current & future bottle-necks Reduce logistic costs due to sourcing changes RISKS & CONSIDERATIONS: Verify Source capacities Verify distances between Sources and CMSCs Determine if production streamline can be achieved (1 source to 1 CMSC?)
  14. Analysis Part II: Inventory Control (T.A)
  15. Analysis Part II: Inventory Control (T.A)
  16. Analysis Part II: Inventory Control (T.A) Kanban System
  17. Analysis Part II: Challenge at Hand (T.A)
  18. Analysis Part II: Challenge at Hand (T.A) Causes Effects Improper Forecasting of demand Stock outs in CMSCs. Higher orders leading to increased lead times Shifting of demand to different facilities Reduced capability to fix inventory to facilities Basic reliance on truck and air for transportation Truck transport results in longer lead time Air transport results in higher transport cost Increases number of shipments and adds to overall cost Product shipment normally of LTL size High Risk Moderate Risk Low Risk
  19. Analysis Part II: Facing the Challenge T.A Supply Chain Process Optimization Production Plants Maintain the 3-day shipment cycle. Prioritize west-coast orders to counter higher lead time Consolidation & Transportation Employ third party transportation to avoid LTL shipments Consider shipping via rail routes W87 to cater specifically to west coast CMSCs Increase buffer stock levels in W87 to reduce inventory buildup in CMSCs W87 Distribution Center New Distribution Centre Function in parallel with west coast facilities to meet demand Employ resource pooling to reduce safety stock build up
  20. Implementation: Options
  21. Option 1: BuildNew Warehouse (N.H) Decrease lead time in Western area Decrease inventory levels in Western area Decrease frequency of premium freights Lower transportation costs Give flexibility to major warehouses Not small amount of capital expenditure Not easy to redesign supply chain Not easy to find the place
  22. Option 2: Review Demand Forecast N.H
  23. Option 3: Verify Re-order Point (N.H) Decrease excess inventory and shortage Easy to implement Not necessarily eradicate shortage Not necessarily decrease lead time
  24. Identify location * Close to a major city * Coverage of CMSCs Implementation Plan (N.H) Legal formalities * State Govt. regulations * Compliance Design capabilities * Supply chain networks * Capacity Construction * Shorter lead time * Better inventory levels at CMSCs
  25. Control: Overcoming Potential Risk N.H
  26. Road to Success (N.H)
  27. END
  28. Additional Slides
  29. Optimization Model
  30. Optimization Model
  31. Optimization Model
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