The following term paper provides a theoretical, as well as practical approach to assess Alpha’s complexities occurring in the supply chain. Therefore, in the first part theoretical models are used to solve issues concerning sourcing and supply chain management. Later in the term paper the theoretical adjustments and improvements are combined with a linear programming approach, to create a more practical approach.
Alpha is an internationally operating company and so is their supply chain. The firm contains of two manufacturing locations, one in Germany and one in India. The German plant mainly manufactures products for Europe, the Middle East and Africa (EMEA). Simultaneously, Alpha’s Indian production location serves the Asian market. In order to get a tighter connection to their customers and achieve higher margins, Alpha recently dismissed all their intermediate dealers. This strategical adjustment provides them with the opportunity to bring their company closer to the customer and to achieve a deeper insight about their behaviors and needs, by simultaneously accomplishing some financial benefits.
Table of Contents
1. Introduction
2. Operations Functions and Global Supply Chain of the Lightning GBU
2.1. Overall Assessment and Improvement Recommendations of the Operations Functions
2.1.1. Supply Chain
2.1.2. Planning Process
2.1.3. Sourcing
2.1.4. Production
2.1.5. Storing
2.1.6. Delivery
2.2. Global Supply Chain Mapping and Types
3. Global Sourcing Strategy for “Emergency Luminaire – injection moulded parts”
4. Lean Manufacturing Principles
5. Shipment Improvements
5.1. Air freight
5.2. Container freight
6. Business Modelling
6.1. Transportation Problem and LP Problem
6.2. Production Problem and LP Problem
6.3. Revenues and Profit
6.4. Additional Questions
6.4.1. Excess Capacity
6.4.2. Rubber Shortage
6.4.3. Dependency on Iron Sheets
6.4.4. Dependence between the demand in Dubai and the production in India
6.4.5. Integer Number of Products
6.4.6. Sensitivity Report for Transportation Problem
7. Conclusion
Objective and Core Topics
The primary objective of this term paper is to provide a combined theoretical and practical analysis of the supply chain complexities within Alpha’s "Lighting" global business unit. The research focuses on evaluating existing operational functions, developing optimized sourcing strategies, and applying linear programming models to solve logistical and production constraints to improve profitability.
- Operations management and supply chain assessment
- Strategic sourcing for injection moulded parts
- Application of lean manufacturing and "Just-in-Time" principles
- Logistical shipment improvements and third-party logistics (3PL) selection
- Linear programming for transportation and production cost optimization
Excerpt from the Book
2.1.2. Planning Process
Alpha’s planning process is conducted very purely. They are mainly concentrating on differentiating their customers into specific segments by describing their buying habits and behaviors, which is one essential part of a reliable and meaningful planning procedure. The identified customer segments are listed in the following:
Centralized buying
Decentralized buying
Original Equipment Manufacturer (OEM)
The purpose of customers conducting centralized buying as well as product standardization is to contribute to decreasing procurement spent. Furthermore, the customer segment centralized buying is concerned about long-term supply continuity.
Customers with a decentralized buying approach see high importance in their products’ adaptability to local needs and circumstances.
Ultimately, the Original Equipment Manufacturer acquires Alpha’s lighting to manufacture complete modules for the oil industry. Therefore, an OEM is the customer type requiring special treatment and an engineering team to individually develop their lighting solution.
All in all, the “Lighting GBU” depicts 4.500 out of 11.500 customers in total globally. As conveyed, Alpha uses a “Behavioral Segmentation” approach in terms of their customers, which is based on their buying and operating behavior. This simplified approach doesn’t cause lacking in predictive value and simultaneously achieves a closer alignment to actual needs.
Summary of Chapters
1. Introduction: This chapter outlines the paper's intent to combine theoretical supply chain models with a practical linear programming approach to address Alpha's operational issues.
2. Operations Functions and Global Supply Chain of the Lightning GBU: An assessment of Alpha’s internal departments and current supply chain structure, identifying the need for improved planning and delivery performance.
3. Global Sourcing Strategy for “Emergency Luminaire – injection moulded parts”: This section details a sourcing strategy using analysis, planning, and definition phases to improve material group efficiency.
4. Lean Manufacturing Principles: A discussion on optimizing job shop manufacturing through "Just-in-Time" principles and enhancing the alignment between production and product design.
5. Shipment Improvements: An evaluation of logistics challenges in India, leading to the selection of a third-party logistics partner and an analysis of container versus air freight options.
6. Business Modelling: This core analytical chapter applies linear programming models to determine cost-optimized transportation routes and optimal production material mixes.
7. Conclusion: A final reflection on the value of combining theoretical frameworks with quantitative modeling for corporate decision-making.
Keywords
Supply Chain Management, Global Sourcing, Lean Manufacturing, Linear Programming, Lighting GBU, Just-in-Time, Logistics, Operational Efficiency, Cost Optimization, Demand Planning, Procurement, Injection Moulded Parts, Third-Party Logistics, Production Planning, Transportation Modelling.
Frequently Asked Questions
What is the core focus of this term paper?
The paper fundamentally addresses the supply chain and sourcing challenges faced by Alpha’s "Lighting" global business unit, aiming to improve operational efficiency and profitability.
What are the primary thematic areas covered in the analysis?
The key themes include supply chain mapping, the development of global sourcing strategies for specific material groups, the implementation of lean manufacturing, and the optimization of international logistics.
What is the main research goal or research question?
The primary goal is to demonstrate how a combination of theoretical analysis and practical linear programming can be used to minimize transportation and production costs while fulfilling customer demand.
Which scientific methods are applied in this work?
The author utilizes standard supply chain management theories, stakeholder power-interest matrices, SWOT analysis, and quantitative linear programming models executed via Excel's "Solver" function.
What topics are discussed in the main body of the work?
The main body covers a comprehensive review of operations functions, a structured sourcing strategy for injection moulded parts, improvements for logistics and shipment, and detailed mathematical models for transportation and production.
Which keywords characterize this document?
Key terms include Supply Chain Management, Global Sourcing, Lean Manufacturing, Linear Programming, Logistics, and Production Planning.
How does the author propose to improve the current planning process?
The author suggests moving from a basic behavioral segmentation towards a collaborative planning approach that integrates suppliers and customers using a unique information platform to cover market, procurement, production, and transportation planning.
What is the result of the transportation optimization in the linear programming model?
By using the "Solver" tool to implement the linear programming model, the author identifies a cost-minimized shipping plan with total transportation costs of 84,354.78€.
- Quote paper
- Tobias Hinterwimmer (Author), 2018, International Operations. A Combination of Business Modelling and Operations Management, Munich, GRIN Verlag, https://www.grin.com/document/456655
