Supply Chain Performance at ETC Final Presentation
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Transcript of Supply Chain Performance at ETC Final Presentation
INSOURCING CONSOLES: IMPROVING SUPPLY CHAIN PERFORMANCE
AT ELECTRONIC THEATRE CONTROLS
Mark CigichDan Sutter
Sanika AbhyankarAbhinav Tallavajhula
Shichuan Quan
Center for Quick Response Manufacturingwww.qrmcenter.org
DirectorProfessor Ananth Krishnamurthy
Project AssistantsBen Quirt & Debjit Roy
Saturday, April 15, 20231
OUTLINE
Saturday, April 15, 20232
About Electronic Theatre Controls Focus Target Market Segment (FTMS)
Structure Supply chain
Project motivation Project goal Project approach Analyses Recommendations Results
COMPANY BACKGROUND
Saturday, April 15, 20233
Founded in 1975 $200 M company Locations in Middleton,
London, Germany, Hong Kong, Netherlands
Products include dimmers, LED lighting, theater controls and architectural lighting
Leaders in theatrical lighting
Consoles
Lighting Fixtures
PRODUCT PLACEMENT
Saturday, April 15, 20234
Broadway hit Dreamgirls, US
The London Studios, UK
Grand Mosque, U.A.EQintai Grand Theater, China
Deal Or No Deal, South AfricaEurovision,Ukraine
FOCUS TARGET MARKET SEGMENT
Saturday, April 15, 20235
CONGO SR: Premium console mainly for the European market 70% sales in Europe and 30% in the US Flagship Console, highly complex
CONGO SR STRUCTURE
Saturday, April 15, 20236
TOP
BOTTOM
Assemblies Sub-Assemblies
PCBPCBPCBPCBPCBPCBPCBPCBPCB
PCBPCB
CABLECABLECABLECABLECABLECABLECABLE
CONGO SR
PROJECT MOTIVATION
Saturday, April 15, 20237
Post in-sourcing difficulties: Extra shipping time and associated cost Language barriers
Benchmark supply chain performance before and after in-sourcing
Identify opportunities for lead time and cost reduction
Defined a new performance metric to evaluate supply chain performance
Improve Manufacturing Critical-path Time (MCT) :
• Create map of the entire supply chain• Evaluate lead-time performance of the supply chain
• Capture system waste• Improve on lead-time, improve on time to market
MCT MAP- USA OPERATIONS
Saturday, April 15, 20238
PCBs
CablesMCTTotal = 1249 days
*demand reduced as product matured
INSIGHTS FROM INITIAL MCTs
Saturday, April 15, 20239
EFFECT ON MCT
Inventory accounts for 94% of MCTTotal (82% MCTRaw , 12% MCTStock )
PCB and Cables account for more than 3x annual CONGO SR demand
In-sourcing adds 28 days transportation lead time
Post in-sourcing distribution of FGI in London, Germany and USA must change
EFFECT ON COST
Money tied up in high PCB and Cable inventory
Possible savings in FGI depending on FGI distribution in London, Germany and US
*RMI levels are high to prepare for in-house assembly
PROJECT GOAL
Saturday, April 15, 202310
To benchmark the manufacturing critical path time of CONGO SR and provide recommendations to target 50% reduction in MCT leadtime, from the current MCTTotal of 1249 days.
PROJECT APPROACH
MCTOper.
MCTStock
Saturday, April 15, 202311
MCTRaw
• In-house inventory of PCBs and cables Inventory level analysis
• Finish goods inventory Inventory Model Cost benefit evaluation
IN-HOUSE INVENTORY- PCBs & CABLES
Saturday, April 15, 202312
PCB and cable inventory in Germany accounts for more than 85% of the MCT
If PCBs and cables can be made in-house Shorter lead time (less than10 days versus 29/85 days) Better control over inventory (shorter lead time)
MCT REDUCTION!
DETERMINING OPTIMUM INVENTORY LEVEL
Saturday, April 15, 202313
Components of inventory:COMPONENT OF INVENTORY PURPOSE
Safety stock Buffer against uncertainty
Production lot Satisfy regular demand
INPUTDemand= 60 units/ yr.
Demand Variance (sales data of 2008-’09)
Lead time= 10 days
Usage Quantity per CONGO SR
SYSTEMCalculating:
Production lot size
Safety stock level
Inventory days(using Little’s Law)
OUTPUTProduction Lot size= 3 months’ demand
Safety stock(Ex.5 units of B5601)
Inventory days(Ex.73 days for B5601)
Contributes to 87% Total Reduction in MCTTotal
Saturday, April 15, 202314
18% Additional Reduction in MCTTotal
IMPACT ON MCTTotal
MCTTotal = 271 days
MCTTotal = 222 days
IMPACTS OF RECOMMNEDATIONS- SUMMARY
Saturday, April 15, 202315
IN-HOUSE PRODUCTION SETTING FGI LEVELS
BEFORE AFTER BEFORE AFTER
MCT Raw 1028 days 73 days - -
MCT Operations 1 day 11 days - -
MCT Logistics 61 days 28 days - -
MCT Stock - - 152 days 104 days
MCT Total 1249 days 271 days 271 days 222 days
% reduction in MCT Total 78% 18%% reduction in material
cost 11% -
% reduction in labor cost 7% -
% savings in unit cost 17% - 21% -
Inventory holding cost 94% 17%
Net reduction in MCT Total = 82% !Net savings in unit cost = 17% to 21% !
IMPLEMENTATION TIMELINE
Saturday, April 15, 202316
Activity Quarter 2 ‘10 Quarter 3 ‘10 Quarter 4 ‘10
Create Eng. Drawings and Mfg. Packages
Manufacture Prototype and make Pilot Runs
Write Additional Work Procedures
Phase in production of Cables based on inventory levels
Phase in production of PCBs based on inventory levels
Modify FGI across all Inventory sites
ACKNOWLEGMENTS
Saturday, April 15, 202317
Alperen Ozalp – Manufacturing Engineer ETC Alex Stoltz – Manufacturing Engineering Manager ETC Professor Ananth Krishnamurthy – Director Debjit Roy, Ben Quirt – Project Assistants