GSCMI-Eaton Case Competition JESSICA MILLER NICK BAFUNNO RAJIV SAMAGOND Team Eight

CURRENT PROBLEMS High premium shipping costs equaling $11,382,074 in 2013 $4,694,652 of premium shipping goes to the West coast (36%) Long lead times – up to 2-3 days to ship to the West coast Frequent stock outs in W87 (CA) *All data are yearly figures

MARKET ANALYSIS Electrical Equipment Manufacturing industry Revenue is expected to rise by 4.4% for the next 5 years Domestic demand is forecasted in increase California has largest share of establishments in the industry (10%) Proximity to top-tier engineering schools and large supply of high-skill workers Iron and steel manufacturing and metal wholesalers also have 10% located in CA Competitors like ABB Ltd. have been expanding to CA Source: IBISWorld Research Services

SOLUTIONS SHORT TERM Build warehouse LONG TERM Build major plant

WAREHOUSE Carries common and uncommon parts Consolidate supplier orders Reduce inventory levels of CMSCs Shorten distance of supply to CMSCs Capable of supporting Eaton Power Distribution Systems in the future

MARKET ANALYSIS Bakersfield, CA Population: 358,597* Market size: $33.4 million Growing economy New construction is on the rise: Caterpillar warehouse Toyota Cognito Motor Sports Location, location, location!!! *United States Census Bureau (2012)

WAREHOUSE Eliminate premium shipping costs, saving $643,915 per year 11% decrease in shipping costs Frees up space in W87 (current utilization over 90%)  Reduce stock outs in W87 Reduce lead time Give CMSCs priority Reduce ordering from other CMCSs (reducing COGS) Consolidate supplier orders

PLANT BUILDS STANDARD AND SPECIALIZED UNITS Reduce cross-country transportation costs by $1,945,138 per year 66% decrease in shipping costs Economies of scales in the west Reduce overall inventory level of CMSCs Capable of satisfying increase in high-tech companies  Shorter lead time *All data are yearly figures

Year 1: Plan Year 2: Build Year 3: Integration Warehouse Years 2-3: Plan Years 4-5: Build Year 6: Integration Plant Sustainable supply chain Incorporate Eaton Power Distribution System Growth IMPLEMENTATION

Thank You! QUESTIONS JESSICA MILLER NICK BAFUNNO RAJIV SAMAGOND