1. GSCMI Case Competition: Sustainable Growth through Network Optimization SCM Consulting Peter Jacobson Raudel Medina Javier Arguello Jin Guo

2. GSCMI 2013 Case Competition 2 West CMSC’s struggle (Peter Jacobson) ProblemRecommendationAnalysisImplementationRisks & Contingencies Supply uncertainty Undeveloped external supply network in west Warehouses (W34, W87) interests not aligned CSMCs CDC interests aligned to CSMCs, but located in east Custom products require custom components Demand uncertainty Customer orders are difficult to forecast Customers demand short lead times Product nature is innovative (highly customized) Supply chain is misaligned with goals of CSCMs in west High shipping costs High inventory holding costs

3. GSCMI 2013 Case Competition 3 Reduce premium freight frequency Minimize overall inventory level Ensure sustainable growth Short-term Eaton’s goals in redesign (Peter Jacobson) Long-term ProblemRecommendationAnalysisImplementationRisks & Contingencies

4. GSCMI 2013 Case Competition 4 An agile supply chain (Peter Jacobson) ProblemRecommendationAnalysisImplementationRisks & Contingencies Reduce supply uncertainty Establish a dedicated warehouse to serve Electrical Division in the west Collaborative replenishment: vendor managed inventory Improve information sharing (EDI) Review / redesign Kanban System Develop supply network in west Reduce demand uncertainty Coordination with customers Postponement Product design: Standardized components/multi-functional parts

5. GSCMI 2013 Case Competition 5 The Solution (Raudel Medina) ProblemRecommendationAnalysisImplementationRisks & Contingencies Leasing a warehouse in the west coast Consignment parts Review/Redesign the Kanban System Broaden external supplier base Standardized components/multi- functional parts

6. GSCMI 2013 Case Competition 6 Solution Analysis (Raudel Medina) ProblemRecommendationAnalysisImplementationRisks & Contingencies W87 provides small amounts of parts to CMSC sites “Other” sites account for the inter- site CMSC inefficient product move Costs of leasing reduces the investment in a permanent site

7. GSCMI 2013 Case Competition 7 Warehouse Location (Javier Arguello) ProblemRecommendationAnalysisImplementationRisks & Contingencies 7 locations = 62% of Premium Shipments Los Angeles and Phoenix minimize transportation costs W87 is located at Los Angeles Phoenix has lower leasing cost Lower labor costs More opportunities to expand 62% Premium

8. GSCMI 2013 Case Competition 8 Eaton’s Success Plan (Jin Guo) ProblemRecommendationAnalysisImplementationRisks & Contingencies

9. GSCMI 2013 Case Competition 9 Other factors (Jin Guo) Uncertain Economic Conditions  Economic slow-down will negatively impact the demand for Eaton’s services  Short-term Lease Contract Project Management Team  Wrong supply chain management team may make the problem worse even with a good supply chain strategy  Select the right team in charge of the project Coordination  Coordination between implementing the new system and satisfying the demand from all sites  Well-designed process to execute the new strategy ProblemRecommendationAnalysisImplementationRisks & Contingencies

10. GSCMI 2013 Case Competition 10 Summary – Q&A Reduce premium freight Control Inventory Long-term Growth

11. GSCMI 2013 Case Competition 11 Backup

12. GSCMI 2013 Case Competition 12 Transportation calculations

13. GSCMI 2013 Case Competition 13 Transportation calculations

14. GSCMI 2013 Case Competition 14 Warehouse leasing Source: http://www.loopnet.com/

15. GSCMI 2013 Case Competition 15 Arizona vs California

16. GSCMI 2013 Case Competition 16 Shipment trends over year

17. GSCMI 2013 Case Competition 17 Eaton’s financials