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Sustainable Growth Through Network Optimization

Sustainable Growth Through Network Optimization. Team Name: Q lean Yunyang Liu Jennifer Lu Hiroaki Tanaka Xueqing Wang. Agenda. Company overview Current situation Recommendation Alternatives analysis Future outlook Conclusion. Overview. Electrical Sector. Company highlight.

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Sustainable Growth Through Network Optimization

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  1. Sustainable Growth Through Network Optimization

    Team Name: Q lean Yunyang Liu Jennifer Lu Hiroaki Tanaka Xueqing Wang
  2. Agenda Company overview Current situation Recommendation Alternatives analysis Future outlook Conclusion
  3. Overview Electrical Sector Company highlight Domestic power Management company $22 billion of sales in 2012, 100 million employees, product exported to 175 countries Four main business sector: Electrical, Aerospace, Vehicle and Hydraulics Products SAT and SVC System structure 16 CMSCs Two plants Two warehouses 1 DBN 1 CDC (third-party)
  4. Current Situation -Western sites struggle to achieve lean operations -Premium shipping cost is high at western sites -Procurement strategy needs to be updated -Redundant logistics mapping countrywide -W87 stocks out frequently -DBN has been inefficiently used
  5. Process Flow CMSC Inventory W87,W34 Order at CMSCs CMSC BOM System Internal Procurement Two Plants Order satisfied CDC DBN External Suppliers
  6. Current Situation -Western sites struggle to achieve lean operations -Premium shipping cost is high at western sites -Procurement strategy needs to be updated -Redundant logistics mapping countrywide -W87 stocks out frequently -DBN has been inefficiently used
  7. Premium Cost Problem
  8. Current Situation -Western sites struggle to achieve lean operations -Premium shipping cost is high at western sites -Procurement strategy needs to be updated -Redundant logistics mapping countrywide -W87 stocks out frequently -DBN has been inefficiently used
  9. Current Situation -Western sites struggle to achieve lean operations -Premium shipping cost is high at western sites -Procurement strategy needs to be updated -Redundant logistics mapping countrywide -W87 stocks out frequently -DBN has been inefficiently used
  10. Recommendation Establish a West coast Specialized Warehouse (WSW)
  11. Alternatives overview Overall, there are two other alternatives that can potentially solve the problems Create New CMSCs In West Coast Build a Warehouse in West Coast
  12. Create New CMSCs In West Coast
  13. Build a Warehouse in West Coast
  14. Extend the Plant storage of CMSCs Building a new WSW to serve exclusively for Electrical Sector will alleviate the pressure of existing warehouses.
  15. Breakdown of POs from CMSCs to W34
  16. West Coast Specialized Warehouse What Hybrid of DBN and Warehouse served exclusively for Electrical Sector Where Near the CMSC in Los Angeles How Expected Capacity: 638,050 Lbs / year (twice the size of DBN) Short term (As soon as possible)
  17. Total Dollar Amount of Purchase Order From CMSC 2013 ($) WSW
  18. Shipping Cost per ($/Lb) West to West
  19. DBN Inventory level
  20. Future Outlook Dallas Inventory level Los Angeles Inventory level Phoenix Inventory level
  21. Conclusion We are going to build a WSW(westcoast specialized warehouse) that exclusively serve CMSCs at Los Angeles to solve the current challenges as well as support the rapid growth of western sites business.
  22. Back Up DBN has been inefficiently used DBN serves only 3.55% SAT and 0.05% SVC in Dallas Frequency of using premium shipping cost and days of on-hand inventory level in west coast
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