DEP GARD Case Study
When reviewing the Supply Chain design for DEP/GARD, there are various stages which add value, and some which fail to add value. Looking at figure 1. below, you will see the diagram outlining the supply chain value stream enabling DEP to delivery product to GARD. Areas which fail to add value, and have the potential to erode DEP’s ability to remain a valued supplier for GARD include the following:
1. Failure to utilize LEAN manufacturing principles causing DEP to carry excess inventory: Inventory shortages which caused shutdowns leading to DEP to abandon LEAN principals look to be primarily driven by a lack of structured supplier management. Suppliers of key raw materials were selected based solely on price, with DEP neglecting the
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Based on this, my assumption is that inventory is immediately available to begin production of the customer order. DEP has a minimum production time of 6 days from receipt and processing of the order to completed production. Material is immediately moved to the warehouse and prepared for shipment. This process takes a minimum of 3 days to complete and ship the order. Similar to my assumption used in calculation of the maximum performance cycle, I assume GARD is within the 200 mile radius. I’m also using the assumption that DEP can make deliveries on the day an order is processed and ready for shipment, provided the order is prepared in sufficient time, thus giving a 1 day shipping time in a best case scenario. This calculates to a 10 day minimum performance cycle.
Looking at the total supply chain, it is possible to improve the consistency of the performance cycle; however, due to the fact that the production process from order receipt to finished product takes 3-6 days, the minimum performance cycle could not be improved. By simply switching to primary use of the 25% and 15% polymer suppliers, there would be opportunity to receive several of the raw materials in as low as 2 days, however if DEP were to shift back to a JIT process, this would simply add two days to the overall current minimum performance cycle (currently, inventory is already on hand), instead of improving the cycle time. For products E and F,