Integrated Logistics for DEP/GARD Case Study Essay

Tom Lippet, sales representative for DEP, feels the quarrel when the successor of mike OLeary, Richard Binish, becomes the new purchasing agent at GARD who plans to trim the production line in the next three years. His plan to narrow the assistant window for suppliers from the original 5 days to 3 days in the next three years to the eventually 1 day window forces Tom to consider courses that can augment the exertion and answer of their company to win the contracts in the future.Solutions for DEP1) Diagram on the Left shows the DEP/GARD total chain.Value adding stages atomic number 18 The inbound transportation from compound suppliers The manufacturing and packaging wait on The wrestle outbound transportation to GARDNon-value adding stages are The compound caudex sitting in DEP (7-day supply) The order transmission time wasted by receiving and handling orders manually The finished product staying in the wareho delectationThe minimum performance wheel around for the supply chain is 9 days, whereas the maximum performance cycle is 20 days.2) The performance cycle can be improved through the use of the 25 percent and 15 percent suppliers. But because DEP used a bidding dodging that emphasized on price, by giving out more pro imputes of the raw materials to the 25% and 15% suppliers, the average variable address per unit leave alone be higher for each compound. However, choosing 25% and 15% suppliers who has a relatively higher guide measure can increase the reliability of inventory availability and reduce the possibility of shortages. Which in turn means that DEP can lower 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 will decrease and in the end if not rescue more for the company, at least balances the extra costs used by purchasing from 15% and 25% suppliers. A Performance Statistics of Compound Suppliers copied from the combine Log istics for DEP/GARD Case Study is shown in the next page. For instance, we can see that the hold rate for company 1 is relatively low comparing to opposite suppliers. And in the case of compound E and F, we have to reason to fix these two compounds from company 1 since it not only has the lowest 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.3) Things to do if I were Tom LippetChange the bidding governance in a way that DEP is able to purchase more compounds from suppliers with a higher fill rate and lower performance cycle indecision, in order to reduce the days of inventory storage. (Peoplechallenge Employees reluctance and unwillingness to change in the manufacturing department.) Communicate with compound suppliers before the next bid and inform them the changes that are going on. Tell them the importance to reduce their performance cycle uncertainty and in crease their fill rate. And that these two criteria are also going to be considered as well on the next bid. (Challenge a) Disturbed relationship mingled with buyer and supplier. b) Ethics issues. ) To facilitate the order transmission process in order to reduce the performance cycle, a more reliable internet-based learning 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 heed is highly recommended to ensure exact day delivery, and cost savings will incur from less labor force required in the warehouses. (People challenge Possible resentment and intentional sabotage or strikes from warehouse personnel. To reduce the process, appropriate procedures should be taken to help the workers to find alternative jobs. )4) Its important to let Richard Binish to realize how the company is con sistently improving fit in to his expectations. Maintaining a competitive 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 change integrity collaboration. Of course, the criteria will be continuously changing when supply chain prudence becomes more sophisticated and evolved over time. There will eventually be a day when the fill rates required become coke% and the service window will not be exact day delivery but exact time delivery for DEP. With the industrys average standard constantly increasing, continuous improvement on supply chain management is necessary in order to survive in todays competitive environment.