by: Aashish PanwarAnubhaw Kumar Shandilya

Ishan Bhalchakra

The Bis Corporation: A Case Study

established in 1964 - family venture – growsduring 70's and 80's at a fairly steady rate. manufacturing plants in Atlanta and

Denver.

1⁰ Warehouses – 17 in numbers.Around Retail Stores.Gross Margin – 20 %

Newly functioning CEO along with 12 Shareholders.

Introduction

8

2, 000

Production and Distribution Strategy: produce & store at the manufacturing plant. pick, load, & ship to warehouse center. unload and store at warehouse.Pick, load, & deliver to stores.

Inefficient Supply Chain: inbound truck utilization, inventory turns, & low service levels …

At present

Improving the effectiveness and aligning the cost of service.

Reengineering the production, inventory, & logistics functions.

To Define the best network configuration.To determine the positioning of inventory.To focus on specificity on the production

process in the plants.

Areas to work in…

Objectives…

Data for demand in 2004 by SKU per product Family for each customer zone.

Annual production capacity (in SKU) at each manufacturing plant.

Maximum capacity (SKUs) for each warehouse, new and existing.

Transportation costs per product family per mile.

Setup cost for establishing a warehouse .

Potential locations for new warehouse.

??In hand…Stock Keeping unit (SKU)

Definition Warehousing item

that is unique because of some characteristic (such as brand, size, color, model) and must be stored and accounted for separate from other items. Every SKU is assigned a unique identification number (inventory or stock number).

Constraints…High degree of Services – other competing

products in the market.Delivery Time 1 day for most of the

retail outlets.Non building of manufacturing plant – Risk &

Uncertainty involved.Non uniform volume growth as the product is

varying amongst product family. Estimated Yearly Growth(2006-07):

Family 1 2 3 4 5multiplier 1.07 1.03 1.06 1.05 1.06

Demand Estimation:- To locate customers, retailers, warehouses (1⁰ & 2⁰), suppliers, & production.

Customer Segmentation:- To know the product variety, and distribution of product to a particular customer zone.

Warehouse: To consider total number of warehouses, location of warehouse, number of SKUs, warehouse capacity, maintenance cost of inventory etc.

Analysis:- Least cost square method, Linear programming model.

Solutions…

Reduction in lead time:- EDI (Electronic Data Intervention).

Strategic Partnership: Vendor managed Inventory.

Reduction in Risks & Uncertainty: Through Point of Sale, Sharing Information, & using proper forecasting model and sharing with other stakeholders.

Cont/-

Thank you

Paint your life with…

Bis Paints!!