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8/3/2019 PRESENTACIN EJECUTIVA V1.
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CPE Inventory Optimization Project
NOVEMBER 13, 2008
NOMBRE MATRICULA SEDE
Marco Antonio Silva A01048110 CD. JUAREZ
Javier Snchez Flores A00266037 SALTILLO
Miguel Casillas Velasco A00343715 COLIMA
Carlos Sergio Arrieta Serrato A00343714 COLIMA
INGENIERA DE LA
PRODUCTIVIDAD
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Inventory Optimization Report
Points of Discussion
Definition of the Problem
Root Causes
Current Process Map
Improvement Opportunities
Suggestions for opportunities found
Financial Benefits
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Problem Definition
Shipping costs in May increased $61k due toexcessive overnight shipments of CPE
Stock requirement analysis is manual, timeconsuming, and cumbersome
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Root Causes
Unstable Supply Chain Shipping costs in May increased $61k due to excessive
overnight shipments of CPE> Stock-out due to:
Delay in approving PO Delay from Vendor in getting the PO in their system Delay in normal vendor shipping time frame
Re-Stocking analysis is manual, time consuming, andcumbersome Systems provide pieces of data that must be manually manipulated
in Excel to obtain:> Field shipment orders> Stock replenishment quantity
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Start
InventoryInformation Systems
Inventory Gets the reportOf products needed for
two week period
SalesSales Person enter
info. on MSS
Inv. Ships the productto Market Site
Inventory depletes stockfrom Warehouse Using
the Replenishment System
Inv. Package the Product
Market Sites Receiveequipment
Distribution to differentsites
Market Sites enters equipment intoMSS as equipment Available
Sites Receive OrdersTo install equipmentField Tech. Change MSS
Equipment from Available to In Service
Field Tech. Goes and InstallEquipment Field Tech. Deletes Equipment
From MSS.
Nuvox Bills the customer
$
Nuvox Bank
RICH PICTURE OFINVENTORY SYSTEM
(System # 1 )
Sub- System 2
Sub System# 3
Current Process High Level
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Current Process
INVENTORY HANDLING PROCESS
Inventory goesto MSS and pullReports in order
to find what'sneeded to be
shipped tomarket sites
Not Installed Report(NIR)
TSP ScheduleDrillable Report
Installed YTD Report(IR)
Cleaning Reports
Combine all TSP Reportsinto one
Called Total TSP
Conbine Total TSP intoNIR
Combine IR into NIR
Rename NIR to CPESummary Report
CPESummaryReport issent to
warehouseElectronically
Warehouseverifies reportwith currentinventory(Manually)
Warehouseprepares
material to beshipped
WarehousecreatesPOs of
inventorythat will beshipped.
Warehouseships the
product/s tomarketsites
Marketsites
receiveequipmentand enter it
into thesystem
Financialreceives
POs
electronically
POs
approved?
Yes
No
Request ofinstallation isneeded andMarket site
assigns serial #to customer POand change theclassifications
Market siteinstalls
equipment
FieldTechnicianreturn to thesystem anddelete partfrom thesystem.
End
Warehousereceives
confirmationelectronically
Warehousefax the POs
to Supplier
SupplierreceivesPOs and
send back aconfirmationemail with
delivery time
Supplierprepares
and sendsequipment
Warehousereceives
equipmentand store it
Warehousekeeps
copies ofopen POs
Confirmationnotice is store
on thecorresponding
Open PO
Warehouseattached
closes thePO with the
receiverfrom
supplier.
End
Delay Process
3 .1 .5 2 40 1 .5 3 .25
.5 .25 40 .1 .25 40 160 2
50.35hours/6.3 Days
261.72hours/32.71
Days
Non Valueactivities
Chance forImprovement
Non Value, but notaffecting the
process
NVA= 3TNVA=3
VA=0TVA=0
NVA= 1.5TNVA=247.1
VA=.5TVA=1.6
NVA= 160TNVA=245.6
VA=0TVA=1.1
NVA= 40TNVA=85.6
VA=0TVA=1.1
NVA= 0TNVA=45.6
VA=.25TVA=1.1
NVA= 40TNVA=45.5
VA=0TVA=.85
NVA= .25TNVA=5.5
VA=0TVA=.85
NVA= .1TNVA=45.6
VA=0TVA=.85
NVA= 1.75TNVA=5.25
VA=.75TVA=.85
NVA= .5TNVA=3.5
VA=0TVA=.1
NVA= 0TNVA=3VA=.1TVA=.1
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May situation
April May June
103103103 10390 9090 90
RCP
Demand
90 9090 90 20620600
Supplier Lead time increased 2 weeks.Internal Approval process was delayed 1 week from ournormal 1 week period.
This causes overnight shipments from China and to US market
Balance -103-206-1030000 0
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Improvement Opportunities
Quicker PO approval process
Automatic shipping and re-stocking analysis
Decrease supplier lead time
Utilize bar code scanners to integrate with
inventory system
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Improvement Actions
Develop fully automated daily report to provide re-stock amounts and field shipping details. Field Shipping detail:
> Order #> CLLI> TSP Date> Market> Equipment
Re-Stock Amounts> Part Number> Quantity
Enhance CPE approval process. Decrease time from PO request to submission to Cisco:
> Provide Harold with unilateral authority to replenish stock to approved stock levels Generate daily/weekly reports to advise executive management of capital commitment
> Obtain SLAs from Operations/Finance approval management to work Pos quickly
Special capital purchase circumstances, such as TitleMax, will be handled ICB
Pursue new Cisco supply strategy to reduce lead time to delivery. Provide minimum of an 8 week notice for shipping forecasts
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Why Safety Stock is important
April May June
103103103 10390 9090 90
RCP
Demand
90 9090 90 10310300
Balance 0077180180180 0
Safety Stock
180
180 26
2 weeks ahead we see a change in demand and we place an order to compensate safetystock. 26
Supplier has been committed to supply every week. But what if they fail? We place and
order for material taken from safety stock.
What if they fail another week. We use remaining stock plus the one that came in.
This Model shows that we are covered for two week period.
StockRecovery
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Contingency Plans
We considered the possibility of alternative company tostock equipment. Based of annual cost we did notconsidered beneficial.
We will have safety stock of 3 weeks for the following
products:1. 2431-8
2. 2431-16
3. vwic-1mft-t1
4. vwic-2mft-t15. 2432-24
Safety stock will be distributed as follows:2 weeks on ware house1 week on the field.
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New Inventory Process
Sub-System # 3
Start
Inv. Goes to theSystem and gets areport of what is
needed to ship forthe market sites
Inv. Ships productsand enters data into
Inventory ControlSystem (ExcelSpreadsheet)
Is there any productcolored Red?
Create a PO forwhat is indicated inorder to replenish
Safety stock
Save the documentand exit.
No
Yes
Fax PO to VendorAnd notify
Financial of
purchases made.
Monitor POs for
fast delivery.
ReceiveEquipment and
store it
Update InventoryControl System
End
END
Note: This procedure assumes
Weekly shipments from Cisco.
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Summary
Enhanced PO approval process Automated Field distribution reporting
Eliminated manual labor increasing accuracy
Automated the re-stock analysis system Optimized stock levels
Minimized capital commitment
Decreased supplier lead time