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 critical service component of their supplier’s delivery capabilities. This lack of consistent and reliable delivery required DEP to carry excess safety stock, increasing their inventory carrying costs, and reducing the ability to produce on a JIT basis.
2. Manual order receipt and handling process: Orders are placed via fax and phone to the marketing and sales department, at which time orders are manually entered into the order information system. Lost faxes, order entry personnel entering an order incorrectly, or even being distracted by another priority leading to failure to enter the order at all; these are all potential failures by not having a more up to date, automated ordering processes with their customers.
3. Inconsistent timeline to complete pick, pack, and ship process at the distribution warehouse: There is a three day variation in the time it takes for an order to leave the warehouse once it is received from manufacturing. Without additional details, I cannot comment on the cause for this long time fence, however from a high level overview, I’m using the assumption that the warehouse follows generally a similar process to perform their tasks to enable final shipment, thus a 3 day variation in the time it takes to
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 critical service component of their supplier’s delivery capabilities. This lack of consistent and reliable delivery required DEP to carry excess safety stock, increasing their inventory carrying costs, and reducing the ability to produce on a JIT basis.
2. Manual order receipt and handling process: Orders are placed via fax and phone to the marketing and sales department, at which time orders are manually entered into the order information system. Lost faxes, order entry personnel entering an order incorrectly, or even being distracted by another priority leading to failure to enter the order at all; these are all potential failures by not having a more up to date, automated ordering processes with their customers.
3. Inconsistent timeline to complete pick, pack, and ship process at the distribution warehouse: There is a three day variation in the time it takes for an order to leave the warehouse once it is received from manufacturing. Without additional details, I cannot comment on the cause for this long time fence, however from a high level overview, I’m using the assumption that the warehouse follows generally a similar process to perform their tasks to enable final shipment, thus a 3 day variation in the time it takes to