Sustainable Growth through Network Optimization

Team 9 Edward Addo-ChidieJonathan Westwood

Ratna Buelah KondraWilliam Ebow Hinson

GSCMI 2013 Case Competition 2

Problem

Optimization model

Q & A

EatonCorporation

Recommendations – Short term

Agenda (Ratna Buelah)

Recommendations – Long term

GSCMI 2013 Case Competition 3

Problems (Jonathan Westwood)

High premium shipping costs

GSCMI 2013 Case Competition 4

Problems (Jonathan Westwood)

Internal inefficiencies: high inventories

GSCMI 2013 Case Competition 5

Problems (Jonathan Westwood)

Frequent Stock outs at W87

GSCMI 2013 Case Competition 6

Optimization Model (William Hinson)

Shipping costs and capacity – Given

Assumption:Total orders in 2013 represent demandLTL shipping available & cost remains stable

GSCMI 2013 Case Competition 7

Recommendations (Edward Addo-Chidie)

Short term strategy Optimize factory shipments

DemandUnmet

Demand $1,680,8281,391,770 0 Shipping Cost475,319 0

1,217,881 0 16,251,567609,432 0 Total capacity

1,702,936 01,061,806 0 14,647,2231,194,800 0 Total demand1,319,869 01,707,960 0 90.1%485,295 0 Utilization661,880 0540,145 0630,455 0561,014 0505,666 0580,994 0

GSCMI 2013 Case Competition 8

Recommendations (Edward Addo-Chidie)

Weight delivered from each source

Fayetteville, NC Sumter, SC W34 W87 CDC DBN Arden, NC Beaver, PA

El Paso, TX

Raleigh, NC NC Others

ATL 0 0 1,391,770 0 0 0 0 0 0 0 0 0

Balt 0 0 0 0 0 0 0 0 0 0 0 475,319

Chi 0 0 366,857 0 0 0 0 851,024 0 0 0 0

Cle 0 0 0 0 0 0 0 609,432 0 0 0 0

Dal 1,130,040 0 218,069 0 0 354,827 0 0 0 0 0 0

Den 0 0 0 559,349 0 0 0 0 502,457 0 0 0

Hart 0 77,109 0 0 0 0 0 0 0 0 0 1,117,691

Hou 0 0 1,319,869 0 0 0 0 0 0 0 0 0

L.A. 0 0 0 1,707,960 0 0 0 0 0 0 0 0

NJ 0 0 0 0 0 0 0 0 0 0 0 485,295

Orl 661,880 0 0 0 0 0 0 0 0 0 0 0

Phx 0 0 0 540,145 0 0 0 0 0 0 0 0

Ral 0 0 0 0 0 0 0 0 0 286,187 0 344,268

StL 0 0 378,792 0 0 0 182,223 0 0 0 0 0

SF 0 0 0 505,666 0 0 0 0 0 0 0 0

Sea 0 0 0 580,994 0 0 0 0 0 0 0 0

Capac 3,506,162 2,313,812 3,675,357 666,013 709,653 354,827 182,223 1,460,456 502,457 286,187 171,846 2,422,574

Excess 1,714,242 2,236,704 0 0 709,653 0 0 0 0 0 171,846 0

GSCMI 2013 Case Competition 9

Recommendations (Edward Addo-Chidie)

Short term strategy Reduce or eliminate premium shipments Reduce or stop sourcing from Puerto Rico

- 97% of Puerto Rico shipments were ordered by Dallas

- Dallas spent the most on premium shipping ($1.6 million)

GSCMI 2013 Case Competition 10

Recommendations (Ratna Kondra)

Long term strategy Increase capacity at W87 by 200% in 2 years

W87

Others

El Paso, TX

NC

Sumter, SC

Raleigh, NC

Beaver, PA

CDC & DBN

Fayetteville, NC

Arden, NC

Puerto Rico

W34

-0.3 -0.2 -0.1 0 0.1 0.2 0.3 0.4 0.5 0.6

Correlation with % Premium Shipping

GSCMI 2013 Case Competition 11

Recommendations (Ratna Buelah)

Long term strategy Possibly add storage to CMSCs similar

to DBN in Dallas (more data is needed to evaluate this)

GSCMI 2013 Case Competition 12

Q&A