IE 3101: Supply Chain Modeling Project Gita Ayu Damie Bartley Wendy Hsia Leon Liu Peter Severa

Company Overview Media Packaging Company –CD Jewel Cases –DVD Cases –Video, Audio packaging, etc..

Company Background Atlanta Precision Molding –Japanese Owned Palladium - Nexpak –4 th Largest Injection Molding Company –Largest Supplier of Media Packaging for Audio and Video formats

Company Background Competitors Acquired –Joyce Molding –Alpha Media Packaging Mercury Foam Competitors –Viva –Tritex Magnetics –Shape (bankrupt)

Supply Chain Flow-Chart Suppliers Purchasing Manufacturing Logistics Shipping Consignment Materials Requirements Raw Materials Engineering Raw Material Levels Inventory Allocations Inventory Levels Finished Goods Shipping Quantities Inventory Customer Orders Customers Finished Goods Sales Customer Orders Shipping Quantities Materials Flow Information Flow

Suppliers Chevron, Dow, and Nova Chemicals –Polystyrene Benzene and Ethylene –Gas Prices Price increased by 100% since January 2000 Chesapeake, VA –Shipped by barge SuppliersPurchasingManufacturingLogisticsShipping

Purchasing Raw Materials Delivered by truck daily ROP is one to two days stock –monthly projection adjusted daily 24 hour Safety Stock Use Push & Pull method –Suppliers use 3-month projection –NEXPAK has control to change deliveries Lead time is days SuppliersPurchasingManufacturingLogisticsShipping

Manufacturing Polystyrene –General Purpose Clear Trays –High Impact Tray Inserts SuppliersPurchasingManufacturingLogisticsShipping

Manufacturing Efficiency –¼ million lbs per day 70 million lbs per year 1.1 billion products per year 1.5-3% product is scrapped –Control software used to monitor polystyrene levels SuppliersPurchasingManufacturingLogisticsShipping

Manufacturing Product Mix NEXPAK produces five different products DVD cases will start production in January 2001 –additional three machines SuppliersPurchasingManufacturingLogisticsShipping

Manufacturing Storage of Product / Packaging –Palettes 42”x42” 40”x40” * –Shelf Life 2-3 Months SuppliersPurchasingManufacturingLogisticsShipping

Manufacturing Capacity –Atlanta facility is largest 221,000 sq. ft 140 Employees 101 Injection Molding Machines Fully Automated Production Line –76 Machines on Slow Line –25 Machines on Fast Line –Current output averages 1.5 million trays / day (3.3 million pieces) SuppliersPurchasingManufacturingLogisticsShipping

Manufacturing Special Orders –Two week lead time –Higher production cost Requires special mold to be made Cost of special mold is absorbed by Nexpak SuppliersPurchasingManufacturingLogisticsShipping

Manufacturing Quality Assurance for Customer Service –Customer reported defects Warpage Packaging –Inspection occurs every four hours –One bundle is inspected per machine for criteria Visual Defects Physical Defects SuppliersPurchasingManufacturingLogisticsShipping

Logistics Seasonal Demand Pattern –No problem with stock-outs –No production is outsourced SuppliersPurchasingManufacturingLogisticsShipping

Logistics Inventory –2-3 weeks held on-site million units –Two offsite inventory locations Long-term Consignment Warehouse –Logistics International SuppliersPurchasingManufacturingLogisticsShipping

Logistics Logistics International –Floor space and time based fees Only pay for space that is used –Provide carrier service SuppliersPurchasingManufacturingLogisticsShipping

Shipping Ships full truckloads LTL shipping occurs very infrequently Shipping to Europe done by sea –Only done if European facility cannot meet demand Order cut-off time is 1pm ET SuppliersPurchasingManufacturingLogisticsShipping

Shipping Distribution –10-30 different locations per month 3-4 Truckloads per location per day –Main distribution center in Indiana under consideration –Atlanta Facility truckloads daily for pre-holiday season 6-8 truckloads daily during the off-season SuppliersPurchasingManufacturingLogisticsShipping

Customers Sony Warner Brothers Seagram's BMG 20 Smaller companies –TDK, EMI, JVC...

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