Designing and managing thesupplychainChapter 6Supply Chain Integration主讲王长琼Whatisintegration
Designing and managing the supply chain Chapter 6 Supply Chain Integration What is integration 1 主讲 王长琼
Case:DellPCSupplyChain* Understanding Dell's manufacturing pattern* Contract manufacturing
Case: Dell PC Supply Chain Understanding Dell’s manufacturing pattern Contract manufacturing 2
CriticalComponentsofaDesktopPC&MajorComponentManufacturersChipsetMotherboardAMDASUSIntelFoxconnIntelMiTACPrintedCircuitDesktopPCBoardAcerBTI ElectronicsAppleCompeqDellGCEDesktopChassisFujitsu SiemensPlatoElectronicASUSGatewayFlextronicsHPLAN ChipFoxconnLenovo/IBMBroadcomMiTACCompanylistisnotcomprehensive3IntelLite-OnImagesusedonthispagebelongtotherespectivecompanies
3 Critical Components of a Desktop PC & Major Component Manufacturers Chipset AMD Intel Motherboard ASUS Foxconn Intel MiTAC Desktop Chassis ASUS Flextronics Foxconn MiTAC Lite-On Desktop PC Acer Apple Dell Fujitsu Siemens Gateway HP Lenovo/IBM Company list is not comprehensive. Images used on this page belong to the respective companies. LAN Chip Broadcom Intel Printed Circuit Board BTI Electronics Compeq GCE Plato Electronic
Read book Fig. 6-2 and Fig.6-3 in Page 162-163PCassembly> Level
Read book Fig. 6-2 and Fig.6-3 in Page 162-163 PC assembly Level 4
L6 vS. L5L6MB5Weeks00ChinaDellCustomerSupplierIntegrationManufacturingLogisticsCenterChassisL53rd Party Integrator(managedbyEquipmentManufacturers)L5 additional costMB1WeekDellSupplierManufacturingChassisLogisticsCustomerCenter5Weeks
L6 vs. L5 L5 MB Chassis 5 Weeks 1 Week Dell Manufacturing Customer Supplier Logistics Center 3 rd Party Integrator (managed by Equipment Manufacturers) L6 MB Chassis 5 Weeks China Integration Dell Manufacturing Supplier Customer Logistics Center : L5 additional cost
L6 vs.L5: Value ComparisonL5L6:Integrated inside a Dell facility:Integrated offshore & outside a DellfacilityChassis shipped on water.Integrated motherboard-inside.Motherboards shipped by airchassis shipped on water+Increased supplychain+Laborsavingsflexibility+MB air-freighting costs areIncreasedmotherboardair-eliminatedfreighting costs+Reduced motherboard packaging-3rd-party integration cost in UScostsSeparatelogisticalcostsforReducedsupplychainflexibilitychassisandmotherboardsMoremotherboardsneedtobere-worked intheeventofan MB ECNL6 is morecost-effectivethan L5.6
6 L6 vs. L5: Value Comparison L5 • Integrated inside a Dell facility • Chassis shipped on water • Motherboards shipped by air + Increased supply chain flexibility – Increased motherboard airfreighting costs – 3 rd-party integration cost in US – Separate logistical costs for chassis and motherboards L6 • Integrated offshore & outside a Dell facility • Integrated motherboard-inside chassis shipped on water + Labor savings + MB air-freighting costs are eliminated + Reduced motherboard packaging costs – Reduced supply chain flexibility – More motherboards need to be reworked in the event of an MB ECN L6 is more cost-effective than L5
ManufacturingCosts:L5>L6CostsCommon to L5andL6Costsof doing either L5 or L6:TypeMaterialsRawmaterial costsChina materials transportation costsLogisticsChinaassembler'scost(FoxconnperformingL1-->L5)LaborChassisocean-shipping costLogisticsChassisUStransportationcost(trucks,rail)LogisticsChassis inventoryholding costat SLCInventoryHoldingLaborUSassembler'scostatDell(fromL7-->L10)L6OnlyCostsCostsofdoingL6ratherthanL5TypeLaborChinaassembler'scost(FoxconnperformingL6)L5OnlyCostsCostsofdoingL5,ratherthanL6:TypeMaterialsMotherboardpackagingcostMotherboardair-freight/expeditecostLogisticsLogisticsMotherboardUStransportationcostInventoryHoldingMotherboardinventoryholdingcostatSLCChassis&motherboardUStransportationcostLogistics(fromSLCtolocal/regionalintegratorandback)LaborLocal/regional integrationcost(Accurate,Saberex)Labor/QualityMotherboardreworkcostatDellDellL5mgmtcost(e.g.ExpediteCouncil)Labor
7 Manufacturing Costs: L5 > L6. Costs Common to L5 and L6 Costs of doing either L5 or L6: Type Raw material costs Materials China materials transportation costs Logistics China assembler's cost (Foxconn performing L1->L5) Labor Chassis ocean-shipping cost Logistics Chassis US transportation cost (trucks, rail) Logistics Chassis inventory holding cost at SLC Inventory Holding US assembler's cost at Dell (from L7->L10) Labor L6 Only Costs Costs of doing L6, rather than L5: Type China assembler's cost (Foxconn performing L6) Labor L5 Only Costs Costs of doing L5, rather than L6: Type Motherboard packaging cost Materials Motherboard air-freight/expedite cost Logistics Motherboard US transportation cost Logistics Motherboard inventory holding cost at SLC Inventory Holding Chassis & motherboard US transportation cost (from SLC to local/regional integrator and back) Logistics Local/regional integration cost (Accurate, Saberex) Labor Motherboard rework cost at Dell Labor/Quality Dell L5 mgmt cost (e.g. Expedite Council) Labor
ProblemStatementSince July 2004,Dell andits contractmanufacturers (CMs) have had to adapt anincreasing % of L5 manufacturing:1.Empty chassis are shipped by ocean (L5) toDell US & Europe first. Motherboards arethen air-freighted to Dell US & Europe.2.Dell incurs motherboard expedite/air-freightcost and 3rd-party integration cost.3.CMs incur cost for idle labor dedicated forMB-chassis integration
8 Problem Statement Since July 2004, Dell and its contract manufacturers (CMs) have had to adapt an increasing % of L5 manufacturing: 1.Empty chassis are shipped by ocean (L5) to Dell US & Europe first. Motherboards are then air-freighted to Dell US & Europe. 2.Dell incurs motherboard expedite/air-freight cost and 3rd-party integration cost. 3.CMs incur cost for idle labor dedicated for MB-chassis integration
L6MB5Weeks0ChinaDellCustomerSupplierIntegrationManufacturingLogisticsCenterChassisMaketostockMaketoorderPushPullIntegration?Components production planning?Productproduction planning?
L6 MB Chassis 5 Weeks China Integration Dell Manufacturing Supplier Customer Logistics Center Make to stock Make to order Integration? Components production planning? Product production planning? 9 Pull Push
6.1Introduction* Effective ScM (by definition) implies:* Efficient integration of suppliers, manufacturerswarehouses,andstores.* Coordinate activities across the supply chain*Improveperformance:reduce cost, increase service level, reduce thebullwhip effect, better utilize resources, and effectivelyrespond to changes in the market place.How to integrate?Issues?Challenges?10
6.1 Introduction Effective SCM (by definition) implies: Efficient integration of suppliers, manufacturers, warehouses, and stores. Coordinate activities across the supply chain Improve performance: reduce cost, increase service level, reduce the bullwhip effect, better utilize resources, and effectively respond to changes in the market place. How to integrate? Issues? Challenges? 10