Optimizing cmsc supply chain
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Optimizing CMSC Supply Chain. Team Kunat Sandeep Repaka Kasey Carter Kunat Chongcharoenpaisarn Curt Isenbarger. Agenda (Sandeep). The CMSC network Issues Options Recommendation Strategy & Implementation Conclusion Questions. The CMSC Network (Sandeep).

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Optimizing CMSC Supply Chain

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Optimizing CMSC Supply Chain

Team Kunat

Sandeep Repaka

Kasey Carter

Kunat Chongcharoenpaisarn

Curt Isenbarger


Agenda (Sandeep)

  • The CMSC network

  • Issues

  • Options

  • Recommendation

  • Strategy & Implementation

  • Conclusion

  • Questions


The CMSC Network (Sandeep)

  • Customized products for Eaton’s Electrical Sector

  • 16 CMSCs across the USA to serve local and regional customers

  • Source major portion of materials from Eaton’s plants at Sumter, SC and Fayetteville, NC

  • Enhance both the brand image and customer relationships


Issues (Sandeep)

Optimizing Supply Chain Network

Short Term

Reduce the frequency of premium freight shipping

Lower days of inventory on hand of west coast sites

Long Term

Maintain a supply chain network that sustains the growth of two of Eaton’s business sectors – Electrical and Power Distribution Systems


Options(Sandeep)

Option 1 - Build one or more CMSCs

+

Supports long term goals, reduces regional logistics costs, increases demand responsiveness and improves inventory turnover

-

Costs of setting up new CMSCs could be high, talent acquisition can be a barrier

Option 2 - Build a major warehouse

May not necessarily address long term goal since new warehouse only stock for the Electrical Sector

-

+

Supports short term goals, alleviates pressure on existing warehouses

Option 3 - Extend storage of CMSCs

May not fully support short term and long term goals

Requires less investment, improves performance of local CMSCs

-

+


Recommendation(Kasey)

Short Term

Expand Dallas DBN warehouse to the size of W34

(Largest volume CMSC site)

85% of total PO $ sourced from P.R. & W34!


Recommendation(Kasey)

Inefficient frontier


Recommendation(Kasey)

Long Term

Build new CMSC near Salt Lake City and/or Las Vegas

Provides help to where it is most needed

Supports new West Coast tech companies

Enables further expansion for Eaton


Strategy & Implementation(Kunat)

  • Implementation period - EOY 2014

  • Pay Back Period - Y 2021

Financial impact


Strategy & Implementation(Kunat)

Inventory pooling


Strategy & Implementation(Kunat)

Inventory pooling


Strategy & Implementation(Kunat)

6 major locations in West Coast can order from new warehouse, without building a Factory or relying on Premium Shipping

Inventory pooling


Conclusion(Curt)

  • More targeted distribution network

    • Transportation waste can be decreased

    • Less reliance on premium shipping

  • Expand Dallas DBN to full-size warehouse

    • Immediately reduce premium shipping to Dallas – the largest market

  • New CMSC in the West

    • Response to increasing West Coast demand

    • Shorter lead time for demanding tech companies


Questions?


Appendix


Cost Analysis


Cost Analysis


Pooling Inventory Analysis

Impact on DIO (DOH) : Inventory / COGS


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