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GSCMI-Eaton Case Competition

This proposal suggests building a major plant and warehouse in California to reduce premium shipping costs, shorten lead times, and consolidate supplier orders. By eliminating premium shipping costs and reducing stock outs, the proposed solutions aim to improve efficiency and profitability.

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GSCMI-Eaton Case Competition

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  1. Team Eight GSCMI-EatonCase Competition Jessica miller Nick bafunno Rajiv samagond

  2. CURRENT PROBLEMS • High premium shipping costs equaling $11,382,074 in 2013 • $4,694,652 of premium shipping goes to the West coast (36%) • Long lead times – up to 2-3 days to ship to the West coast • Frequent stock outs in W87 (CA) *All data are yearly figures

  3. Source: IBISWorld Research Services MARKET ANALYSIS Electrical Equipment Manufacturing industry • Revenue is expected to rise by 4.4% for the next 5 years • Domestic demand is forecasted in increase • California has largest share of establishments in the industry (10%) • Proximity to top-tier engineering schools and large supply of high-skill workers • Iron and steel manufacturing and metal wholesalers also have 10% located in CA • Competitors like ABB Ltd. have been expanding to CA

  4. SOLUTIONS Short term Long Term Build major plant • Build warehouse

  5. WAREHOUSE • Carries common and uncommon parts • Consolidate supplier orders • Reduce inventory levels of CMSCs • Shorten distance of supply to CMSCs • Capable of supporting Eaton Power Distribution Systems in the future

  6. MARKETANALYSIS Bakersfield, CA • Population: 358,597* • Market size: $33.4 million • Growing economy • New construction is on the rise: • Caterpillar warehouse • Toyota • Cognito Motor Sports • Location, location, location!!! *United States Census Bureau (2012)

  7. WAREHOUSE • Eliminate premium shipping costs, saving $643,915 per year • 11% decrease in shipping costs • Frees up space in W87 (current utilization over 90%) • Reduce stock outs in W87 • Reduce lead time • Give CMSCs priority • Reduce ordering from other CMCSs (reducing COGS) • Consolidate supplier orders

  8. PLANT Builds standard and specialized units • Reduce cross-country transportation costs by $1,945,138 per year • 66% decrease in shipping costs • Economies of scales in the west • Reduce overall inventory level of CMSCs • Capable of satisfying increase in high-tech companies • Shorter lead time *All data are yearly figures

  9. IMPLEMENTATION

  10. Thank You! Jessica miller Nick bafunno Rajiv samagond Questions

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