Inventory Management, Financial Analysis and Facility Detailing, American Axle & Manufacturing
Summer Student Team: Matt Bobrowski, Koji Yamada, Sayan Sinha
Spring Student Team: Joey Meisberger, Taylor Haws, Matt Jung, Gisela Condado, Pablo Martinez, Akshit Bajpai
Project Description: In 2014, American Axle & Manufacturing, Inc., purchased what is now AAM’s Rochester Manufacturing Facility (ROMF), which is a 71,000 square foot facility with various machine tools in Rochester, Indiana. This is the first IN-MaC project grant for the center which emphasizes Indiana economic improvement. The project objective is to model, analyze and evaluate various proposals to maximize the Gross Profits, Contribution Margin and Internal Rate of Return (IRR) to support the utilization planning for the open floor space currently available. Through the adoption of these modeling and analysis capabilities, this project will result in the following outcomes:
1. Written proposal and recommendation of various alternatives utilizing a variety of academic methods/tools.
2. Final Project Summary to support the cost justification and project return on investment, implementation plan, etc. Detailed inventory storage management models and multiple plant layouts were recommended. Also included were financial analysis, material flow and SWOT analysis for different plant configuration and optimization of storage space including holding cost analysis.
Inventory Optimization Project, Coleman Cable (2013-2014)
Student Team: Linjie Wang, David Windmiller, Xiangyang Song
Faculty Advisor: Sang-Phil Kim
Project Description: CCI is a leading manufacturer and innovator headquartered in Waukegan, IL which produces wire, cable and other electrical products, serving a multitude of channels and industries. CCI categorizes their broad assortment of products into 4 categories; Industrial, Electronic, Assembled and Copper Fabrication. Over the past 40 years, CCI has built the business through a series of strategic acquisitions and organic growth to ensure exceptional performance. The scope of this engagement was to both optimize inventory levels and investigate changes in production quantities for Coleman Cable. The team’s recommendations were presented in a PowerPoint presentation and Excel worksheets, and included suggestions for implementing a (Q, r) inventory control policy, focused on implementing reorder points and levels of safety stock in order to reduce lead time to the fabrication department’s customer. These reorder points and levels of safety stock were suggested according to both normal and Poisson distribution models.
Additionally, optimal production quantities (batch sizes) were proposed for 9 of CCI’s products according to the Economic Order Quantity (EOQ) model.
Rubber Raw Materials, Coleman Cable
Student team: : Christine Zhang, Deepika Mokkarala (MSGSCM 2013), Isra Gadri (MSGSCM 2013), Yichen Ding (MSGSCM 2013)
Faculty Advisor: Julia Kalish
Project Description: During the summer semester of the Masters in Global Supply Chain Management program, a team of students worked on a project for Coleman Cable Inc. through the GSCMI center. Coleman Cable, Inc., headquartered in Waukegan, Illinois, is a leading manufacturer and innovator of electrical and electronic wire and cable products for security, sound, tele-communications, electrical construction, retail, commercial, industrial, irrigation, and automotive markets. The team was faced with inventory and supplier issues and acted as student consultants from Purdue for the Coleman Cable Inc. Lafayette, Indiana branch specifi cally in the rubber raw material department. After Coleman Cable Inc. decided to manufacture the rubber component for their products at their own facility, they were faced with new challenges in vendor and inventory management of the raw materials. The project’s main objective was to avoid shortages in inventory of the raw materials and to bring about a consistent ordering pattern. The team analyzed the data available since the production had begun and provided an excel based inventory model which dealt with the purchasing and maintenance of 45 critical parts coupled with the MRP (Material Requirements Planning) system utilization. This solution helped reduce shortages in inventory. Students also worked towards a vendor management system by which the company could bring about an ordering pattern among 22 diff erent suppliers. They documented the changes in processes and made the solution more fl exible for future enhancements. The solution required no investment and slight adjustments were made to the internal processes to accommodate this model which helped the company reduce their production and procurement costs. As students in the Global Supply Chain Management program it was an excellent learning experience for the team to be able to apply classroom lessons to solve industry challenges. The company is currently using this model for purchasing and inventory management and is considering extending this solution to other departments with similar issues.
Inventory Management & Production Planning, Coleman Cable
Student team: : Randall Miao (MSGSCM 2013) Shankar Rajagopalan (MSIA 2013), Sunil Merumu (MBA 2014)
Faculty Advisor: Julia Kalish
Project Description: This project with Coleman Cables Inc. (CCI) was about inventory management and production planning. The project provided understanding on how inventory management works in organizations. During the course of the project, it was evident that even advanced planning systems have drawbacks. This project primarily dealt with made to order items, where there is immense pressure due to lead times and hence such planning is of utmost importance. The team, along with company representatives with able guidance from Dr. Julia Kalish and the GSCMI center, came up with an advanced system to estimate process losses and incorporate losses into the planning system. Traditionally, these losses lead to mismatch in inventory management and often lead to shortages. For a cable manufacturer, shortages can be very troublesome as requirements are in terms of length, and shortages in meeting requirements would mean making the entire cable again. The system developed helped CCI address the issue of matching copper lengths with insulation requirements. Having an opportunity to work with a real life problem gave the students great insights into planning systems and the impacts of how it might aff ect business and customer relationships in general.
Spare Parts Inventory Management, Evonik
Student team: Ana Romero, Joshua Kwak(MBA 2013), Sutapa Paul(MBA 2013), Roshan Picardo(MBA 2013), Susana Restrepo (MBA 2013)
Faculty Advisor: Qi Annabelle Feng
Project Description: Evonik is one of the largest specialty chemical companies. It is headquartered in Germany and does business globally. It has its presence in more than 100 countries and operates production plants in 24 countries. The employee strength is approximately 33,000. The core business is focused on high-growth megatrends such as health, nutrition, efficiency and globalization. In regards to performance (2011), Evonik generated sales of €14.5 billion and operating result of €2.8 billion.
Evonik acquired the Tippecanoe Laboratory from the previous owner Eli Lilly, as a strategic investment to enlarge their presence in the pharmaceutical industry. This purchase augments Evonik’s exclusive business of synthetics in America and adds capacity for additional market growth. Evonik’s exclusive Synthesis & Amino Acids Business Line - part of the company’s Health & Nutrition Business Unit - focuses on the customized production of pharmaceutical intermediates, active pharmaceutical ingredients, amino acids, and high-quality derivatives. The data analysis part of this experiential learning process entails understanding of diverse machinery and their spare parts in the T2C fermentation unit of the Tippecanoe labs.
Production Planning at Verallia (Phase I)
Student team: Aniesh Aravin (MBA 2013), Ivan Banchs (MBA 2014), , Pedro Gerum (IE Undergraduate 2013) , Stephen Masters(MBA 2013), Vijay Sachdeva(MBA 2013)
Faculty Advisor: J. George Shanthikumar
Project Description: Verallia, a subsidiary of Saint-Gobain Company is number three glass packaging manufacturing company in the world contributing to 9% of Saint-Gobain’s FY 2011 sales. Given that packaging is a very challenging business where growth is qualified by the substitute products; as a result – Verallia is looking to gain competitive advantage by measures such as cost-savings so as to bring more efficiencies at the table.
Demand uncertainty is one of the major operational challenges at Verallia. The focus of this project was to help identify some of the areas which could be improved in such a situation which could better the demand prediction and planning thereby improving the production output rates, cost of production and reduce manual intervention.