DEP GARD Case Study Essay

When reviewing the Supply Chain design for DEP/GARD, there atomic number 18 various stages which add value, and slightly which fail to add value. Looking at figure 1. below, you de split up see the diagram outlining the affix cosmic string value stream enabling DEP to language product to GARD. Areas which fail to add value, and have the potential to eat away DEPs ability to remain a valued supplier for GARD include the following 1. Failure to lend oneself LEAN manufacturing principles causing DEP to carry excess breed Inventory minusculeages which ca utilise shutdowns leading to DEP to abandon LEAN principals manifestation to be primarily driven by a neediness of structured supplier management. Suppliers of key sensible materials were selected based solely on price, with DEP neglecting the critical service component of their suppliers delivery capabilities. This lack of consistent and reliable delivery required DEP to carry excess safety stock, increasing their inventory carrying costs, and reduce the ability to produce on a JIT basis.2. Manual tack together receipt and handling process Orders are placed via fax and phone to the marketing and sales department, at which time scores are manu anyy entered into the baseball club information system. Lost faxes, order entry personnel entering an order incorrectly, or even existence distracted by another priority leading to failure to enter the order at all these are all potential failures by not having a more up to date, automated order absorbss processes with their customers. 3. Inconsistent timeline to get by pick, pack, and ship process at the distribution warehouse There is a three daytime variation in the time it takes for an order to leave the warehouse once it is received from manufacturing.Without additional details, I cannot comment on the cause for this long time fence, however from a high direct overview, Im using the assumption that the warehouse follows generally a similar process to fulfil their tasks to enable final shipment, thus a 3 day variation in the time it takes to complete these tasks seem to degrade value. 4. Twice-a-week delivery options for customers within 200 miles of DEP This appears to show a lack of flexibility on the part of DEP in terms of delivery capabilities to local customers. Assuming a Tuesday and Thursday delivery schedule, and order that is ready to ship late Thursday (possibly missing the fleet truck leaving the warehouse), now give not ship until Tuesday the following week, adding three business eld to the measure implementation speech rhythm to the order. Stages which are value added1. Same day movement of produced finished goods to warehouse 2. Utilization of DEP fleet trucks to make deliveries to short distance customersFigure 1.Upon reviewing the primary suppliers of polymer feedstock for DEP, specifically the suppliers awarded with 60% of the volume, I am able to calculate a maximum performance beat of 25 age to del iver product to GARD. Assuming inventory is non available for virtually reason requiring an order from polymer suppliers, the longest lead time to receive polymer is 9 days from the 60% suppliers. To receive, process, and produce the material for the customer order, you then add 8 days, as this is the longest end product cycle time. Orders are sent to the warehouse, ready for shipping, and another 6 days may elapse ahead the order is actually shipped. Using the assumption that GARD is within the 200 mile radius, the longest time that delivery may take place based on twice a week deliveries is 2 days. This gives us a total of 25 days. Vice versa, when looking at the stripped-down performance cycle for this total tot chain of mountains, I calculated a 10 day cycle.DEP has abandoned LEAN principles and stores 7 days worth of inventory on hand at all times. Based on this, my assumption is that inventory is immediately available to begin production of the customer order. DEP has a minimum production time of 6 days from receipt and processing of the order to completed production. Material is immediately moved to the warehouse and prepared for shipment. This process takes a minimum of 3 days to complete and ship the order. Similar to my assumption used in calculation of the maximum performance cycle, I assume GARD is within the 200 mile radius. Im also using the assumption that DEP can make deliveries on the day an order is treat and ready for shipment, provided the order is prepared in sufficient time, thus giving a 1 day shipping time in a best case scenario.This calculates to a 10 day minimum performance cycle. Looking at the total confer chain, it is possible to improve the consistency of the performance cycle however, cod to the fact that the production process from order receipt to finished product takes 3-6 days, the minimum performance cycle could not be improved. By simply switching to primary use of the 25% and15% polymer suppliers, there would be opportunity to receive several of the raw materials in as low as 2 days, however if DEP were to shift back to a JIT process, this would simply add two days to the general current minimum performance cycle (currently, inventory is already on hand), instead of improving the cycle time. For products E and F, the minimum lead time is 4 days, still negating opportunity for improvement. Automated ordering systems (online, trafficker managed inventory, etc) would allow for a more consistent process and reduce opportunities for manual failure on the part of DEP, to theoretically narrow the gap from the current 3-6 days to produce finished product from the time of order placement.Similarly, shifting to a delivery cycle of daily shipments for customers within 200 miles would also reduce divergence in delivery times. If I were Tom Lippet in this scenario, there are several changes I would make, some of which I have touched on previously. Current inventory strategies may not be the or so o ptimal in terms of cost, however Toms concern is of service to GARD, as price is already in line with market competitors. Based on this and due to the variant in supply time consistency from polymer raw material suppliers, I would not make any changes to inventory strategies. However, due to the variability in the time it takes to produce product from the time of order, as well as the variability in the time it takes to process an order for shipment at the warehouse, I would work with supply chain leadership to request a detailed value stream map of the entire internal supply chain process, to highlight the key areas causing such variability and work to implement improvement strategies to cut back these times on a consistent basis.In terms of shipping, I again would work with supply chain leadership to analyze the cost-benefit impact of either moving to ta daily delivery road with the DEP truck fleet, or look at the opportunity to supplement utilizing common carriers where DEP tr ucks are unable to delivery in the shortest time window possible. In order to sell Richard Binish on DEPs capabilities to deliver consistently within the service level criteria now required by GARD, I would highlight critical improvements existence implemented by DEP to better align capabilities with Richards service requirements from key suppliers. Obviously, price is a common adjustment criteria component, and I would need to ensure that these improvements made within DEPs supply design did not trick up costs to the point of erodingmargin or requiring a price increase to the level of price ourselves out of the GARD business.Product quality is also critical, but we already know that DEP product is in line with competitors in terms of quality, thus making it somewhat of a commodity product. Price and service will be the critical components. I will need to visually show demonstrated improvement in delivery service since these improvements were implemented as compared to historical service to GARD. Assuming that these improvements were masteryful, there theoretically should be a much higher demonstrated performance level within a tighter service window. In closing, Supply Chain management plays a critical role in the overall commercial success of a business. Setting proper service expectations and maintaining levels within that range is critical to maintaining share with key customers. Analyzing gaps in those performance expectations from a customer against actual capabilities, and actively working to close the gaps should be an ongoing process.