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IE 3101: Supply Chain Modeling Project

IE 3101: Supply Chain Modeling Project. Gita Ayu Damie Bartley Wendy Hsia Leon Liu Peter Severa. Company Overview. Media Packaging Company CD Jewel Cases DVD Cases Video, Audio packaging, etc. Company Background. Atlanta Precision Molding Japanese Owned Palladium - Nexpak

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IE 3101: Supply Chain Modeling Project

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  1. IE 3101: Supply Chain Modeling Project Gita Ayu Damie Bartley Wendy Hsia Leon Liu Peter Severa

  2. Company Overview • Media Packaging Company • CD Jewel Cases • DVD Cases • Video, Audio packaging, etc..

  3. Company Background • Atlanta Precision Molding • Japanese Owned • Palladium - Nexpak • 4th Largest Injection Molding Company • Largest Supplier of Media Packaging for Audio and Video formats

  4. Company Background • Competitors Acquired • Joyce Molding • Alpha Media Packaging • Mercury Foam • Competitors • Viva • Tritex Magnetics • Shape (bankrupt)

  5. Supply Chain Flow-Chart Engineering Purchasing Customers Raw Material Levels Customer Orders Sales Materials Requirements Suppliers Shipping Customer Orders Shipping Quantities Customer Orders Raw Materials Logistics Finished Goods Inventory Allocations Inventory Levels Shipping Quantities Manufacturing Consignment Inventory Finished Goods Materials Flow Information Flow

  6. Suppliers Purchasing Manufacturing Logistics Shipping Suppliers • Chevron, Dow, and Nova Chemicals • Polystyrene • Benzene and Ethylene • Gas Prices • Price increased by 100% since January 2000 • Chesapeake, VA • Shipped by barge

  7. Suppliers Purchasing Manufacturing Logistics Shipping Purchasing • Raw Materials • Delivered by truck daily • ROP is one to two days stock • monthly projection adjusted daily • 24 hour Safety Stock • Use Push & Pull method • Suppliers use 3-month projection • NEXPAK has control to change deliveries • Lead time is 10-14 days

  8. Suppliers Purchasing Manufacturing Logistics Shipping Manufacturing • Polystyrene • General Purpose • Clear Trays • High Impact • Tray Inserts

  9. Suppliers Purchasing Manufacturing Logistics Shipping Manufacturing • Efficiency • ¼ million lbs per day • 70 million lbs per year • 1.1 billion products per year • 1.5-3% product is scrapped • Control software used to monitor polystyrene levels

  10. Suppliers Purchasing Manufacturing Logistics Shipping Manufacturing • Product Mix • NEXPAK produces five different products • DVD cases will start production in January 2001 • additional three machines

  11. Suppliers Purchasing Manufacturing Logistics Shipping Manufacturing • Storage of Product / Packaging • Palettes • 42”x42” • 40”x40” * • Shelf Life • 2-3 Months

  12. Suppliers Purchasing Manufacturing Logistics Shipping Manufacturing • Capacity • Atlanta facility is largest • 221,000 sq. ft • 140 Employees • 101 Injection Molding Machines • Fully Automated Production Line • 76 Machines on Slow Line • 25 Machines on Fast Line • Current output averages 1.5 million trays / day (3.3 million pieces)

  13. Suppliers Purchasing Manufacturing Logistics Shipping Manufacturing • Special Orders • Two week lead time • Higher production cost • Requires special mold to be made • Cost of special mold is absorbed by Nexpak

  14. Suppliers Purchasing Manufacturing Logistics Shipping Manufacturing • Quality Assurance for Customer Service • Customer reported defects • Warpage • Packaging • Inspection occurs every four hours • One bundle is inspected per machine for 20-30 criteria • Visual Defects • Physical Defects

  15. Suppliers Purchasing Manufacturing Logistics Shipping Logistics • Seasonal Demand Pattern • No problem with stock-outs • No production is outsourced

  16. Suppliers Purchasing Manufacturing Logistics Shipping Logistics • Inventory • 2-3 weeks held on-site • 10-15 million units • Two offsite inventory locations • Long-term • Consignment Warehouse • Logistics International

  17. Suppliers Purchasing Manufacturing Logistics Shipping Logistics • Logistics International • Floor space and time based fees • Only pay for space that is used • Provide carrier service

  18. Suppliers Purchasing Manufacturing Logistics Shipping Shipping • Ships full truckloads • LTL shipping occurs very infrequently • Shipping to Europe done by sea • Only done if European facility cannot meet demand • Order cut-off time is 1pm ET

  19. Suppliers Purchasing Manufacturing Logistics Shipping Shipping • Distribution • 10-30 different locations per month • 3-4 Truckloads per location per day • Main distribution center in Indiana under consideration • Atlanta Facility • 10-20 truckloads daily for pre-holiday season • 6-8 truckloads daily during the off-season

  20. Customers • Sony • Warner Brothers • Seagram's • BMG • 20 Smaller companies • TDK, EMI, JVC ...

  21. Questions?

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