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 transcript:

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

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

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

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

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

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

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

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

13 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 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 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 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 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 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 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 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 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 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 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April Location Matrix for All Five Cases Scenario: Red & Black 2005 & 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 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April Location Matrix for All Five Cases Scenario: Red & Black 2005 & 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 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April 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 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April Red & Black 2005 Demand Coverage 2005

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

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

24 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April Conclusions Summary Recommendations for location of warehouses & associated inventory levels1 Evaluation of scenarios based on projected demand data for 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 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April Thank you Tech Supply Chain Associates Q&A

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

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

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

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

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

31 Tech Supply Chain Associates ISyE 6203 – Transportation and Supply Chain Systems, Prof. Vande VateConfidentialProject Presentation April Backup slides Safety stock calculation Number of WHsTotal Safety Stock Safety StockObj. ValueTotal $55, $4,525, $66, $3,446, $67, $3,110, $79, $2,811, $87, $2,630, Variables Service level0.97 Lead time 5weeks Std Dev in Lead time0.5weeks