Sustainable Growth through Network Optimization

1. Sustainable Growth through Network Optimization Team Name: Consolidated Consulting Carson Corporon Xinlei Fan Petra Ghicu Ellie Lin

2. Introduction Petra Ghicu Ellie Lin Junior MGMT & Finance Xinlei Fan Senior MGMT & Acct Carson Corporon Junior Industrial MGMT Petra Ghicu Junior MGMT & Acct

3. Assumptions Petra Ghicu

4. Assumptions Petra Ghicu

5. Assumptions Petra Ghicu

6. Assumptions Petra Ghicu

7. Assumptions Petra Ghicu

8. Problem StatementPetra Ghicu Currently, Eaton is facing high premium freight and high overall inventory levels which increases costs and limits sustainable growth.

9. Recommendations Carson Corporon • Texas • Increase lean by adding additional capacity in warehouses in order to reduce highly utilized DBN and reduce premium shipping costs • West Coast • CDC the CDC to a more optimal location as to reduce external order lead times.

10. Recommendations Carson Corporon • Texas • Increase lean by adding additional capacity in warehouses in order to reduce highly utilized DBN and reduce premium shipping costs • West Coast • Increase lean by removing inefficiencies and adding additional capacity in warehouses in order to reduce stock-outs and accommodate future orders • CDC e the CDC to a more optimal location as to reduce external order lead times.

11. Recommendations Carson Corporon • Texas • Increase lean by adding additional capacity in warehouses in order to reduce highly utilized DBN and reduce premium shipping costs • West Coast • Increase lean by removing inefficiencies and adding additional capacity in warehouses in order to reduce stock-outs and accommodate future orders • CDC • Move the CDC to a more optimal location as to reduce external order lead times

12. Analysis Carson Corporon

13. Large number of lbs. shipped premium to CA and TX

14. High monthly ending inventory in CA and TX

15. W87 is highly under-utilized compared to W34

16. Large number of lbs. shipped long distances to Western locations

17. Options Ellie Lin * Could be a specialized warehouse if necessary

18. Options Ellie Lin * Could be a specialized warehouse if necessary

19. Options Ellie Lin * Could be a specialized warehouse if necessary

20. Options Ellie Lin * Could be a specialized warehouse if necessary

21. Option 1: Upgrade Dallas DBN to Warehouse Xinlei Fan

22. Option 1: Upgrade Dallas DBN to Warehouse Xinlei Fan

23. Option 1: Upgrade Dallas DBN to Warehouse Xinlei Fan • Pros • Upgrades temporary solution to permanent • Increase warehouse usage by other CMSC’s by having larger stock • Strong backup for W34 and W87 in case of any stock-out • Lower premium shipping cost for Dallas CMSCsinvestment

24. Option 1: Upgrade Dallas DBN to Warehouse Xinlei Fan • Pros • Upgrades temporary solution to permanent • Increase warehouse usage by other CMSC’s by having larger stock • Strong backup for W34 and W87 in case of any stock-out • Lower premium shipping cost for Dallas CMSCs • Cons • Restructures Dallas operation • Requires capital investment

25. Option 2 - Lean in California Ellie Lin

26. Option 2 - Lean in California Ellie Lin

27. Option 2 - Lean in California Ellie Lin • Recommendations: • Remove uncommon parts from W87 to allow future expansion of the tech sector and prevent stock out • Add a small DBNto accommodate the less used SVC parts • Long Term: transform DBNto a general warehouse like W34 • Take into account W87 and DBN usage when determining warehouse specialization

28. Option 2 - Lean in California Ellie Lin • Pros • Prevent stock-out for common parts • Decreases lead time • Reduces premium shipping cost • Reduces ending inventory • Cons • Restructures California operation • Requires capital investment • Potential to overestimate future need

29. Option 3: Move CDC to Mid WestPetra Ghicu

30. Option 3: Move CDC to Mid WestPetra Ghicu • Pros • Less transit time to West Coast • Existing east coast plants are able to supply CMSCs • Political-- central corridor states are wealthier than nearby states • Cons • Short-term capital investment • Restructuring order process for external sites • Building a new relationship with another company

31. Final Recommendation Xinlei Fan

32. Implementation Carson Corporon 1 2 3 5 4 0 6

33. Risk s Petra Ghicu

34. Risk s Petra Ghicu

35. Risk s Petra Ghicu

36. Risk s Petra Ghicu

37. Conclusion Carson Corporon • Texas • Increase lean by adding additional capacity in warehouses in order to reduce highly utilized DBN and reduce premium shipping costs within the next two years • West Coast • Increase lean by removing inefficiencies and adding additional capacity in warehouses in order to reduce stock-outs and accommodate future orders within the next 2-6 years • CDC • Move the CDC to a more optimal location as to reduce external order lead times in 4 years

38. Thank you! Q&A?

39. Option 1: Upgrade Dallas DBN to Warehouse Xinlei Fan

40. Large number of lbs. shipped premium to CA and TX

41. High monthly ending inventory in CA and TX

42. W87 is highly under-utilized compared to W34

43. Large number of lbs. shipped long distances to Western locations

44. Lbs. Shipped Premium

45. Miles * Lbs. Shipped

46. Miles Between Locations