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1 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 18 2006 Final.

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Presentation on theme: "1 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 18 2006 Final."— Presentation transcript:

1 1 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 18 2006 Final Presentation Milliken Asia Group II Rakshita Agrawal, Vishal Agrawal Aditya Dhanrajani, Michael Liebmann Uttam Malani, Jenny Zhang April 25 2006 Tech Supply Chain Associates

2 2 ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 18 2006 Outline AProject Overview BThe Model CResults

3 3 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 18 2006 Project Overview DemandSupply Ho Chin Minh Auckland Osaka Bangkok Taipei Shanghai Beijing Jakarta Manila Chennai Kolkata Melbourne Sydney Tokyo Hong Kong Mumbai Seoul Spartanburg Kuala Lumpur

4 4 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 18 2006 Problem Definition Location Decision Collect Data Inventor y Analysis Determine Locations by minimizing overall costs Decision Based on Safety Stock and Service Level

5 5 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 18 2006 Demand Data Overview E2010A2005 Red 5 5 10 Red & black 5 10 5 Total number of cases 20 Σ 2 Periods x 2 Product sets x 5 Scenarios = 20 Cases

6 6 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 18 2006 Demand distribution and forecast Estimated change in product demand 1m 2m 3m 4m 2005 Red Red & Black 2010 Red Red & Black Strong growth projection more impact on profits

7 7 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 18 2006 Outline AProject Overview BThe Model CResults

8 8 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 18 2006 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

9 9 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 18 2006 The Model Pipeline inventory cost Demand at point iaiai Pipeline cost at jcjcj Decision variablex ij Min [ Σ i Σ j e a i D ij x ij + Σ i Σ j a i b j x ij + Σ i Σ j a i c j x ij ] Transportation cost Est. transport coste Demand at point iaiai Distance bn. i and jD ij Set of demand centersi Set of warehousesj Decision variablex ij WH leasing cost Est. leasing cost at jbjbj Demand at point iaiai Decision variablex ij

10 10 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 18 2006 Port Accessibility Factor Routing example #1

11 11 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 18 2006 Port Accessibility Factor Routing example #2

12 12 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 18 2006 Outline AProject Overview BThe Model CResults

13 13 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 18 2006 Location Mapping Scenario: Red & Black 2005 Scenario #1: I WH Auckland Melbourne Sydney Ho Chin Minh Osaka Bangkok Shanghai Beijing Jakarta Manila Chennai Kolkata Tokyo Hong Kong Mumbai Seoul Kuala Lumpur Taipei

14 14 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 18 2006 Location Mapping Scenario: Red & Black 2005 Scenario #2: II WHs Auckland Melbourne Sydney Osaka Bangkok Shanghai Beijing Jakarta Manila Chennai Kolkata Tokyo Hong Kong Mumbai Kuala Lumpur Taipei Ho Chin Minh Seoul

15 15 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 18 2006 Location Mapping Scenario: Red & Black 2005 Scenario #3: III WHs Ho Chin Minh Osaka Shanghai Beijing Jakarta Manila Chennai Kolkata Tokyo Hong Kong Mumbai Seoul Kuala Lumpur Taipei Auckland Melbourne Sydney Bangkok

16 16 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 18 2006 Location Mapping Scenario: Red & Black 2005 Scenario #4: IV WHs Auckland Ho Chin Minh Osaka Shanghai Beijing Jakarta Manila Chennai Kolkata Tokyo Hong Kong Mumbai Seoul Kuala Lumpur Taipei Sydney Bangkok Melbourne

17 17 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 18 2006 Location Mapping Scenario: Red & Black 2005 Scenario #5: V WHs Ho Chin Minh Shanghai Beijing Jakarta Manila Chennai Kolkata Tokyo Hong Kong Mumbai Seoul Kuala Lumpur Taipei Bangkok Auckland Melbourne Sydney Osaka

18 18 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 18 2006 Location Matrix for All Five Cases Scenario: Red & Black 2005 & 2010 20052010 1 Taipei 2 Ho Chin Minh City, SeoulBangkok, Shanghai 3 Bangkok, Sydney, Seoul Bangkok, Sydney, Shanghai 4 Taipei, Seoul, Bangkok, Melbourne Taipei, Seoul, Bangkok, Sydney 5 Bangkok, Seoul, Taipei, Sydney, Osaka Bangkok, Seoul, Taipei, Sydney Osaka # DCs

19 19 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 18 2006 Location Matrix for All Five Cases Scenario: Red & Black 2005 & 2010 20052010 1 Taipei 2 Ho Chin Minh City, SeoulBangkok, Shanghai 3 Bangkok, Sydney, Seoul Bangkok, Sydney, Shanghai 4 Taipei, Seoul, Bangkok, Melbourne Taipei, Seoul, Bangkok, Sydney 5 Bangkok, Seoul, Taipei, Sydney, Osaka Bangkok, Seoul, Taipei, Sydney Osaka # DCs

20 20 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 18 2006 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 Melbourne Sydney Hong Kong Mumbai Bangkok

21 21 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 18 2006 Red & Black 2005 Demand Coverage 2005

22 22 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 18 2006 Red & Black 2010 Demand Coverage 2010

23 23 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 18 2006 Safety Stock Red & Black 2005 Safety Stock Considerations Service Level 97% Lead time 5 weeks Lead time variability 0.5 week

24 24 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 18 2006 Conclusions Summary Recommendations for location of warehouses & associated inventory levels1 Evaluation of scenarios based on projected demand data for 2010 2 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 Asia 2 Effect of transshipment hubs like Singapore on lead times3

25 25 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 18 2006 Thank you Tech Supply Chain Associates Q&A

26 26 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 18 2006 Thank you Backup

27 27 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 18 2006 Safety Stock & Service Level Red 2005 Safety Stock Red 2005Service Level Red 2005

28 28 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 18 2006 Safety Stock & Service Level Red & Black 2005 Safety Stock Red & Black 2005Service Level Red & Black 2005

29 29 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 18 2006 Safety Stock & Service Level Red 2010 Safety Stock Red 2010Service Level Red 2010

30 30 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 18 2006 Safety Stock & Service Level Red & Black 2010 Safety Stock Red & Black 2010Service Level Red & Black 2010

31 31 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 18 2006 Backup slides Safety stock calculation Number of WHsTotal Safety Stock Safety StockObj. ValueTotal 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 level0.97 Lead time 5weeks Std Dev in Lead time0.5weeks

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