CasestudiesCOMPAQSUPPLIEROWNEDINVENTORYPROGRAMMEUnrelenting pressure on Singapore electronics industry has compelledCompaqtoseeknewwaystosimplifyitssupplychainprocess.Exelprovidestheideal logistics solution with its Supplier Owned InventoryprogrammethatoffersCompaqincreasedtime,costandspacesavings.TheChallengeCompaq has been a valued Exel customer in Singapore since 1993.Shipments areair-freighted daily,with time-sensitive goods movingthrough Singapore into various markets around Asia and the world. Thishascontributedtothelevelof successthatnowmarksCompaqasanestablished market leader in the electronics industry.Inthecompetitive world of electronics,wherethe shelf lifeofcomputerproducts could be as short asa fewweeks, Compaq needed to take itsAlpha Servers further up the supply chain, ahead of their competitors,through outsourcing. The challenge was to design a logistics solution thatwouldallowCompaqtofocuspurelyonthemanufacturingprocess-theircoreexpertise.TheSolutionPartof theCompaq/Exel partnership in Singapore includes themaintenanceofa22,oo0sq.fthubforoverseas/localsuppliers.Exelmanagestheinventorycontrol for1,3o0 materialparts using aleadingedge integrated warehousemanagementsystemthathasbeendevelopedin other areas of Exel global supply chain organisation.Thesupplychainsystemswithin the hubareverycomplex.Accuratekitting of material parts according to production schedule,ad hoc requestsand time-defined material transfer toall production lines is vitalto ensuretheCompagproduction line is workingattop efficiency.TheExelpartnership is totally customer-focused. Compaq receives detailed andregular consumptionreportsand inventory controldocumentation thathelps maintain theperformance-measuredoperation.Thedevelopment of this teamfor Compaqhasbeen createdwiththehelpof dedicated and specialised Exel personnel. This team has been drawnfromother areasoftheworld-class businessandworkswithinthecontrolled environmentof the Singaporefacility,whichalso incorporates
COMPAQ SUPPLIER OWNED INVENTORY PROGRAMME Unrelenting pressure on Singapore 抯 electronics industry has compelled Compaq to seek new ways to simplify its supply chain process. Exel provides the ideal logistics solution with its Supplier Owned Inventory programme that of fers Compaq increased time, cost and space savings. The Challenge Compaq has been a valued Exel customer in Singapore since 1993. Shipments are air-f reighted daily, with time-sensitive goods moving through Singapore into various markets around Asia and the world. This has contributed to the level of success that now marks Compaq as an established market leader in the electronics industry. In the competitive world of electronics, where the shelf life of computer products could be as short as a few weeks, Compaq needed to take its Alpha Servers further up the supply chain, ahead of their competitors, through outsourcing. The challenge was to design a logistics solution that would allow Compaq to focus purely on the manufacturing process - their core expertise. The Solution Part of the Compaq/ Exel partnership in Singapore includes the maintenance of a 22,000 sq. f t hub for overseas/ local suppliers. Exel manages the inventory control for 1,300 material parts using a leading edge integrated warehouse management system that has been developed in other areas of Exel 抯 global supply chain organisation. The supply chain systems within the hub are very complex. Accurate kitting of material parts according to production schedule, ad hoc requests and time-defined material transfer to all production lines is vital to ensure the Compaq production line is working at top ef ficiency. The Exel partnership is totally customer-focused. Compaq receives detailed and regular consumption reports and inventory control documentation that helps maintain the performance-measured operation. The development of this team for Compaq has been created with the help of dedicated and specialised Exel personnel. This team has been drawn f rom other areas of the world-class business and works within the controlled environment of the Singapore facility, which also incorporates
the maintenance of a strong roomfor high-value parts. The Exel teamacts as a local agent for suppliers with no tax residence in Singapore,ensuringall theparts required byCompaq canbereceived ontime.ExelhasdevelopedaninnovativeprogrammeforCompaqthatincludestotalsupplierliaison.Exelworksdirectlywithlocalandoverseassuppliersproviding parts material for the production lines.The benefit of thiscollaborationforCompaq isthattheyonlyhaveto deal withonesupplier ?Exel -and all parts are delivered, store maintained andmonitored byExel atthesupplier hub.This hubis outfittedwithahighlyintegrated warehousemanagementsystemand enablesproducttoremain in the ownership of respective suppliers until shippedto Compaq.The complexfacility enables Exel topickmaterial parts inexactquantitiesand transfer them to Compaq production lines.Ownership of the materialis onlytransportedto Compag upon delivery.This is in line withthecustomer movetowards supply chain simplification,reducingturn-around time and lowering inventory of new materialsFurther improvements along the supply chain management will involveshifting the entire kitting centre away from Compaq to the supplier hub.Instead of transporting individual material partsto Compaq.Exel willdeliver completed kits direct to the production lines, further increasingproduction outputandsavingCompaqvaluablespace,timeand costs.The ResultsBy outsourcing its entire warehouse management operation, Compaq,hasbeenabletoconcentrateonitscorecompetencies.Exelmanagement of the Singapore hub has allowed for quick planning andimplementation of the programmeand increased control for Compaqresultingfromliaisonwithonly onesourceofrawmaterialsforproduction.Streamlining the supply chain process while increasing productivity,hasimproved turnaround time and created valuable cost savings onmanpower,warehousespaceandequipment expenditure.Exelwarehousemanagementsystemprovideson-demand informationavailability and provides a complex inventory management for suppliersand consumptionreportsforeaseoftrackingmaterialmovement
the maintenance of a strong room for high-value parts. The Exel team acts as a local agent for suppliers with no tax residence in Singapore, ensuring all the parts required by Compaq can be received on time. Exel has developed an innovative programme for Compaq that includes total supplier liaison. Exel works directly with local and overseas suppliers providing parts material for the production lines. The benefit of this collaboration for Compaq is that they only have to deal with one supplier ?Exel - and all parts are delivered, store maintained and monitored by Exel at the supplier hub. This hub is outfitted with a highly integrated warehouse management system and enables product to remain in the ownership of respective suppliers until shipped to Compaq. The complex facility enables Exel to pick material parts in exact quantities and transfer them to Compaq production lines. Ownership of the material is only transported to Compaq upon delivery. This is in line with the customer 抯 move towards supply chain simplification, reducing turn-around time and lowering inventory of new materials. Further improvements along the supply chain management will involve shif ting the entire kitting centre away f rom Compaq to the supplier hub. Instead of transporting individual material parts to Compaq. Exel will deliver completed kits direct to the production lines, further increasing production output and saving Compaq valuable space, time and costs. The Results By outsourcing its entire warehouse management operation, Compaq, has been able to concentrate on its core competencies. Exel 抯 management of the Singapore hub has allowed for quick planning and implementation of the programme and increased control for Compaq resulting f rom liaison with only one source of raw materials for production. Streamlining the supply chain process while increasing productivity, has improved turnaround time and created valuable cost savings on manpower, warehouse space and equipment expenditure. Exel 抯 warehouse management system provides on-demand information availability and provides a complex inventory management for suppliers and consumption reports for ease of tracking material movement