'Integrated Logistics for DEP/GARD Case Study Essay\r'

'Tom Lippet, sales representative for DEP, feels the quarrel when the successor of Mike O’Leary, Richard Binish, becomes the new purchase agent at GARD who plans to trim the product line of reasoning in the coterminous third years. His plan to peg down the service window for suppliers from the original 5 old age to 3 twenty-four hour periods in the next three years to the eventually 1 day window forces Tom to consider ways that tail end summation the implementation and service of their smart set to win the contracts in the future.\r\nSolutions for DEP\r\n1) Diagram on the Left shows the DEP/GARD supply range.\r\n value adding stages are:\r\n†The inbound exaltation from complicated suppliers\r\n†The manufacturing and forwarding process\r\n†The startbound transportation to GARD\r\nNon-value adding stages are:\r\n†The deepen inventory sitting in DEP (7-day supply)\r\n†The order infection time wasted by receiving and handling orders man ually †The finished product staying in the warehouse\r\nThe minimal capital punishment cycle for the supply chain is 9 days, whereas the maximum performance cycle is 20 days.\r\n2) The performance cycle commode be improved by dint of the use of the 25 part and 15 percent suppliers. But because DEP employ a mastery dodging that emphasized on price, by giving out to a greater extent proportions of the raw materials to the 25% and 15% suppliers, the fair vari able cost per unit impart be gameyer for each compound. However, choosing 25% and 15% suppliers who has a relatively higher adjoin rate net amplification the dependableness of inventory availability and go down the possibility of shortages. Which in turn means that DEP can wiped out(p)er the 7-day supply of each compound to a 6-day or even 5-day supply depending on the reliability of the supplier. By doing so, the inventory carrying cost result go down and in the end if not saving more for the company, at least balances the extra cost used by purchasing from 15% and 25% suppliers. A Performance Statistics of Compound Suppliers copied from the Integrated Logistics for DEP/GARD Case drive is shown in the next page. For instance, we can see that the gormandise rate for company 1 is relatively low comparing to other suppliers. And in the case of compound E and F, we have to reason to procure these both compounds from company 1 since it not only has the last fill rate but also costs the most. All or portion of the compound A and B can be purchased from company 2 or 3 depending on their capacity and performance consistency.\r\n3) Things to do if I were Tom Lippet:\r\nChange the bidding system in a way that DEP is able to purchase more compounds from suppliers with a higher fill rate and lower performance cycle uncertainty, in order to reduce the days of inventory storage. (People challenge: Employee’s reluctance and unwillingness to change in the manufacturing department.) Comm unicate with compound suppliers before the next bid and inform them the changes that are dismission on. Tell them the splendour to reduce their performance cycle uncertainty and increase their fill rate. And that these two criteria are also going to be considered as well on the next bid. (Challenge: a) Disturbed relationship between buyer and supplier. b) morality issues. ) To facilitate the order transmission process in order to reduce the performance cycle, a more reliable internet-based information technology should be used, such as EDI and ERP systems. However, the installation and implementation of an ERP system can be costly and time consuming. The order transportation performance cycle uncertainty is too high (3-6 days). Automated inventory management is highly recommended to figure study day delivery, and cost savings will incur from less labor force involve in the warehouses. (People challenge: Possible resentment and knowing sabotage or strikes from warehouse perso nnel. To mitigate the process, provide procedures should be taken to help the workers to find election jobs. )\r\n4) It’s important to let Richard Binish to strongize how the company is consistently improving according to his expectations. Maintaining a emulous price and quality while enhancing and exceeding their competitors in terms of performance cycle and service would be order-winning criteria for DEP. The implementation of the EDI system will provide real time information between the companies and solidify collaboration. Of course, the criteria will be continuously changing when supply chain management becomes more sophisticated and evolved over time. thither will eventually be a day when the fill rates required become carbon% and the service window will not be exact day delivery but exact time delivery for DEP. With the industry’s comely standard constantly increasing, continuous improvement on supply chain management is necessary in order to survive in to day’s competitive environment.\r\n'