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Transcript of 1 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande...
1Project Presentation April 18 2006
Tech Supply Chain AssociatesISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande Vate Confidential
Final PresentationMilliken Asia Group II
Rakshita Agrawal, Vishal Agrawal
Aditya Dhanrajani, Michael Liebmann
Uttam Malani, Jenny Zhang
April 25 2006
Tech Supply Chain Associates
2Project Presentation April 18 2006
Tech Supply Chain AssociatesISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande Vate Confidential
Outline
A Project Overview
B The Model
C Results
3Project Presentation April 18 2006
Tech Supply Chain AssociatesISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande Vate Confidential
Project Overview
Demand Supply
Ho Chin Minh
Auckland
Osaka
Bangkok
Taipei
Shanghai
Beijing
Jakarta
ManilaChennai
Kolkata
MelbourneSydney
Tokyo
Hong KongMumbai
Seoul
Spartanburg
Kuala Lumpur
4Project Presentation April 18 2006
Tech Supply Chain AssociatesISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande Vate Confidential
Problem Definition
LocationDecision
Collect Data
Inventory Analysis
Determine Locations by minimizing overall costs
Decision Based on Safety Stock and Service Level
5Project Presentation April 18 2006
Tech Supply Chain AssociatesISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande Vate Confidential
Demand Data Overview
E2010A2005
Red 5 5 10
Red & black 5 105
Total number of cases 20
Σ
2 Periods x 2 Product sets x 5 Scenarios = 20 Cases
6Project Presentation April 18 2006
Tech Supply Chain AssociatesISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande Vate Confidential
Demand distribution and forecast
Estimated change in product demand
1m
2m
3m
4m
2005
RedRed
& B
lack
2010
RedRed
& B
lack
Strong growth projection more impact on profits
7Project Presentation April 18 2006
Tech Supply Chain AssociatesISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande Vate Confidential
Outline
A Project Overview
B The Model
C Results
8Project Presentation April 18 2006
Tech Supply Chain AssociatesISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande Vate Confidential
Assumptions
List of Assumptions
Local demand consolidated in demand cities and ports1
No warehouses in India3
Leasing rather than building warehouses ( no capacity constraint)
2
9Project Presentation April 18 2006
Tech Supply Chain AssociatesISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande Vate Confidential
The Model
Pipeline inventory cost
Demand at point iai
Pipeline cost at jcj
Decision variablexij
Min [ Σi Σj e ai Dij xij + ΣiΣj ai bj xij + Σi Σj ai cj xij ]
Transportation cost
Est. transport coste
Demand at point iai
Distance bn. i and jDij
Set of demand centersi
Set of warehousesj
Decision variablexij
WH leasing cost
Est. leasing cost at jbj
Demand at point iai
Decision variablexij
10Project Presentation April 18 2006
Tech Supply Chain AssociatesISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande Vate Confidential
Port Accessibility Factor
Routing example #1
11Project Presentation April 18 2006
Tech Supply Chain AssociatesISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande Vate Confidential
Port Accessibility Factor
Routing example #2
12Project Presentation April 18 2006
Tech Supply Chain AssociatesISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande Vate Confidential
Outline
A Project Overview
B The Model
C Results
13Project Presentation April 18 2006
Tech Supply Chain AssociatesISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande Vate Confidential
Location MappingScenario: Red & Black 2005
Scenario #1: I WH
Auckland
MelbourneSydney
Ho Chin Minh
Osaka
Bangkok
Shanghai
Beijing
Jakarta
ManilaChennai
Kolkata
Tokyo
Hong KongMumbai
Seoul
Kuala Lumpur
Taipei
14Project Presentation April 18 2006
Tech Supply Chain AssociatesISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande Vate Confidential
Location MappingScenario: Red & Black 2005
Scenario #2: II WHs
Auckland
MelbourneSydney
Osaka
Bangkok
Shanghai
Beijing
Jakarta
ManilaChennai
Kolkata
Tokyo
Hong KongMumbai
Kuala Lumpur
Taipei
Ho Chin Minh
Seoul
15Project Presentation April 18 2006
Tech Supply Chain AssociatesISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande Vate Confidential
Location MappingScenario: Red & Black 2005
Scenario #3: III WHs
Ho Chin Minh
OsakaShanghai
Beijing
Jakarta
ManilaChennai
Kolkata
Tokyo
Hong KongMumbai
Seoul
Kuala Lumpur
Taipei
Auckland
MelbourneSydney
Bangkok
16Project Presentation April 18 2006
Tech Supply Chain AssociatesISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande Vate Confidential
Location MappingScenario: Red & Black 2005
Scenario #4: IV WHs
Auckland
Ho Chin Minh
OsakaShanghai
Beijing
Jakarta
ManilaChennai
Kolkata
Tokyo
Hong KongMumbai
Seoul
Kuala Lumpur
Taipei
Sydney
Bangkok
Melbourne
17Project Presentation April 18 2006
Tech Supply Chain AssociatesISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande Vate Confidential
Location MappingScenario: Red & Black 2005
Scenario #5: V WHs
Ho Chin Minh
Shanghai
Beijing
Jakarta
ManilaChennai
Kolkata
Tokyo
Hong KongMumbai
Seoul
Kuala Lumpur
Taipei
Bangkok
Auckland
MelbourneSydney
Osaka
18Project Presentation April 18 2006
Tech Supply Chain AssociatesISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande Vate Confidential
Location Matrix for All Five CasesScenario: Red & Black 2005 & 2010
2005 2010
1 Taipei Taipei
2 Ho Chin Minh City, Seoul Bangkok, Shanghai
3 Bangkok, Sydney,
Seoul Bangkok, Sydney,
Shanghai
4 Taipei, Seoul, Bangkok,
MelbourneTaipei, Seoul, Bangkok,
Sydney
5 Bangkok, Seoul, Taipei, Sydney,
Osaka
Bangkok, Seoul , Taipei, Sydney
Osaka
# DCs
19Project Presentation April 18 2006
Tech Supply Chain AssociatesISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande Vate Confidential
Location Matrix for All Five CasesScenario: Red & Black 2005 & 2010
2005 2010
1 Taipei Taipei
2 Ho Chin Minh City, Seoul Bangkok, Shanghai
3 Bangkok, Sydney,
Seoul Bangkok, Sydney,
Shanghai
4 Taipei, Seoul, Bangkok,
MelbourneTaipei, Seoul, Bangkok,
Sydney
5 Bangkok, Seoul, Taipei, Sydney,
Osaka
Bangkok, Seoul , Taipei, Sydney
Osaka
# DCs
20Project Presentation April 18 2006
Tech Supply Chain AssociatesISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande Vate Confidential
Service Level
2005 Coverage Radii for 3 WHs
Ho Chin Minh
Osaka
Chennai
Tokyo
Seoul
0-2 days
2-4 days
4-7days
Kuala Lumpur
Auckland
Taipei
Shanghai
Beijing
Jakarta
Manila
Kolkata
MelbourneSydney
Hong KongMumbai
Bangkok
21Project Presentation April 18 2006
Tech Supply Chain AssociatesISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande Vate Confidential
Red & Black 2005
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Demand
1 2 3 4 5
# of Warehouses
7+ Day
4-7 Day
2-4 Day
0-2 Day
Demand Coverage 2005
22Project Presentation April 18 2006
Tech Supply Chain AssociatesISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande Vate Confidential
Red & Black 2010
Demand Coverage 2010
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Demand
1 2 3 4 5
# of Warehouses
7+ Day
4-7 Day
2-4 Day
0-2 Day
23Project Presentation April 18 2006
Tech Supply Chain AssociatesISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande Vate Confidential
Safety Stock Red & Black 2005
Safety Stock Considerations
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
1 2 3 4 5
# Of Warehouses
Saf
ety
Sto
ck
Service Level 97%
Lead time 5 weeks
Lead time variability0.5 week
24Project Presentation April 18 2006
Tech Supply Chain AssociatesISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande Vate Confidential
Conclusions
Summary
Recommendations for location of warehouses & associated inventory levels1
Evaluation of scenarios based on projected demand data for 20102
Optimization tool for Milliken to accommodate changing needs and customer base
3
Further Considerations
Special Economic Zones (SEZ’s) and Free Trade Areas1
Frequency of shipping from Spartanburg to Asia2
Effect of transshipment hubs like Singapore on lead times3
25Project Presentation April 18 2006
Tech Supply Chain AssociatesISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande Vate Confidential
Thank you
Tech Supply Chain Associates
Q&A
26Project Presentation April 18 2006
Tech Supply Chain AssociatesISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande Vate Confidential
Thank you
Backup
27Project Presentation April 18 2006
Tech Supply Chain AssociatesISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande Vate Confidential
Safety Stock & Service LevelRed 2005
0
5000
10000
15000
20000
25000
1 2 3 4 5
# Of Warehouses
Sa
fety
Sto
ck
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Dem
and
1 2 3 4 5
# of Warehouses
0-2 Day 2-4 Day 4-7 Day 7+ Day
Safety Stock Red 2005 Service Level Red 2005
28Project Presentation April 18 2006
Tech Supply Chain AssociatesISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande Vate Confidential
Safety Stock & Service LevelRed & Black 2005
0
5000
10000
15000
20000
25000
30000
35000
1 2 3 4 5
# Of Warehouses
Sa
fety
Sto
ck
Safety Stock Red & Black 2005 Service Level Red & Black 2005
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Dem
and
1 2 3 4 5
# of Warehouses
0-2 Day 2-4 Day 4-7 Day 7+ Day
29Project Presentation April 18 2006
Tech Supply Chain AssociatesISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande Vate Confidential
Safety Stock & Service LevelRed 2010
0
100000
200000
300000
400000
500000
600000
700000
800000
1 2 3 4 5
# Of Warehouses
Sa
fety
Sto
ck
Safety Stock Red 2010 Service Level Red 2010
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Dem
and
1 2 3 4 5
# of Warehouses
0-2 Day 2-4 Day 4-7 Day 7+ Day
30Project Presentation April 18 2006
Tech Supply Chain AssociatesISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande Vate Confidential
Safety Stock & Service LevelRed & Black 2010
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
1 2 3 4 5
# Of Warehouses
Sa
fety
Sto
ck
Safety Stock Red & Black 2010 Service Level Red & Black 2010
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Dem
and
1 2 3 4 5
# of Warehouses
0-2 Day 2-4 Day 4-7 Day 7+ Day
31Project Presentation April 18 2006
Tech Supply Chain AssociatesISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande Vate Confidential
Backup slidesSafety stock calculation
Number of WHs Total Safety Stock
SafetyStock Obj. Value Total
1 21185 $55,929.66 4470054.037 $4,525,983.70
2 25181 $66,477.18 3380286.145 $3,446,763.32
3 25599 $67,582.33 3043079.86 $3,110,662.19
4 29989 $79,171.65 2732418.653 $2,811,590.30
5 33237 $87,744.90 2542283.782 $2,630,028.68
Variables
Service level 0.97
Lead time 5 weeks
Std Dev in Lead time 0.5 weeks