Spotlight! 2011 Results
The Tauber Institute for Global Operations is pleased to announce the results of the annual Spotlight! competition held on September 16, 2011.
Over eighty four graduate students from the Ross School of Business (MBA and Master of Supply Chain Management) and College of Engineering presented the results of their 14-week summer projects and competed for over $31,000 in scholarship awards. The event drew high-level corporate executives from Amway, BASF, Coca-Cola, Consumers Energy, Cooper Industries, DTE Energy, Delphi, Chagrin Consulting, Cooper Industries, Eaton, Perrigo, Intel, IBM Software Solutions, Toyoda Gosei, Woodward Inc., and A.T. Kearney who all served as judges for the 33 teams of student presenters.
Edward Grubb was the recipient of the Tauber Alumni Scholarship. Read more...
Please join us in congratulating the winners of the Spotlight! 2011 competition and their faculty advisors.
Spotlight! 2011 Winners
Third Place: CARDINAL HEALTH. – Edmund Chan (MSCM), Ben Seavoy (EGL - BSE/MSE Industrial & Operations Engineering), and Ian Stuart-Hoff EGL (BSE/MSE Industrial & Operations Engineering) came in third place for their project entitled “Reducing Supply Chain Cost Using Improved Ordering Multiples”. Each student was awarded a $3,000 scholarship.
2011 Project Teams
Click on the company name below to view the team project picture.
View the project descriptions of all thirty-three teams: Spotlight! 2011 Project Book (PDF).
BorgWarner Thermal Systems: "Manufacturing Optimization at BorgWarner Cadillac Plant"
BorgWarner is a product leader in highly engineered components and systems for vehicle powertrain applications worldwide. BorgWarner's Cadillac manufacturing facility has 110,000 square feet, employs 208 employees, and manufactures fan drives used in commercial diesel vehicles in the North American medium and heavy duty truck market. To meet increasing demand (sales are expected to increase by about 50% between 2010 and 2012), the plant needed to improve the floor layout.
The existing layout was a result of numerous factors, including recent additions of capital equipment, elimination of older bottleneck operations, and changing business conditions over the past few years. Processes were disjointed and individual product lines did not have dedicated floor space. The net effect was substantial material handling amounting to more than 28 hours per day and 24.4 miles per day of product movement.
The team determined major improvement opportunities by value stream mapping the three main product lines and by creating Pareto charts identifying excessive material handling times, inventory levels, and inventory footprints. Using the findings, the team developed an optimized plant floor layout grouping each product line while opening up available floor space for a new product. The team also developed a set of process changes including introducing multiple one-piece flow washers, purchasing additional quality check machines, and purchasing a base component line sequenced by the supplier. These recommendations achieve the following results:
National Grid: "Improving Productivity and Decreasing Cost of Customer Meter Services"
National Grid is one of the largest investor-owned electricity and gas companies in the world. It is a leading distributor of natural gas in the northeastern US, serving approximately customers in Massachusetts, New Hampshire, New York and Rhode Island. National Grid’s vision is to be the foremost international electricity and gas company, delivering unparalleled safety, efficiency, and reliability to customers. The Customer Meter Services Department (CMS) at National Grid US serves as the primary face of the organization to its customers. CMS is responsible for tasks ranging from immediate leak response to state mandated gas meter changes. The Tauber Project Team performed critical end-to-end analysis on current CMS processes and field productivity. The scope of these efforts was restricted to Massachusetts Gas with flexibility to extend across the entire gas organization in the future.
The team concentrated their efforts on developing an implementable process recommendation, addressing a cultural shift within the organization, and ensuring the long term impact of the recommendations through effective use of accountability metrics. The ultimate goal of the project was to increase the utilization and productivity of field technicians. In order to develop such a recommendation, the team deployed a three-prong approach to address field productivity: developing recommendations for improvement, testing recommendations using an on-site design of experiments pilot, and developing a long-term implementation plan with recommendations for sustained results and further improvement.
Using field research and data analysis, the team identified three primary areas of opportunity to drive greater technician productivity in the field, concentrating the improvement opportunities upstream in dispatch and scheduling. The results of the pilot indicated that a combination of evenly distributing appointments across a geographic region, appropriately sizing appointment schedules to ensure sufficient work for technicians, and facilitating better communication between dispatch and the field, yielded a potential productivity improvement of over 20% per tech per day. The recommendations will result in an anticipated savings of over 40 thousand field hours across the organization.
In addition to rolling out a recommended set of procedural modification through the introduction of new tools and processes, the team helped to drive the cultural shift from within the organization through extensive involvement of key stakeholders and personnel. Their involvement in the design, rollout, and sustainment of the recommendation was critical to drive buy-in and ownership from users. Lastly, the team introduced several new Key Performance Indicators (KPIs) to sustain control of the project in the future; these KPIs will be rolled out throughout Massachusetts gas as an evaluation metric.
Cardinal Health: "Reducing Supply Chain Cost Using Improved Ordering Multiples"
Cardinal Health (CAH) is a Fortune 18 company and a leading global manufacturer and distributor of medical supplies and pharmaceutical technologies. The medical supply segment is working to improve the cost effectiveness of healthcare so that customers can focus on patient care. Many of these cost efficiencies can be realized within CAH's supply chain. Currently, CAH moves their self-manufactured products from factories to large replenishment centers (RC) to distribution centers (DC) and then to hospitals. When moving products from RC to DC, CAH uses a planning system that sets products' ordering parameters. The rounding value is a key parameter that dictates the order multiple used for each product.
The team was tasked with creating a methodology to calculate rounding values that could reduce total supply chain costs and still maintain acceptable customer service levels. The current method for calculating rounding values considers only the days of inventory on hand. This method does not account for the effect of rounding value on the true inventory and warehouse handling costs of a product. The team's goal was therefore to create a methodology that incorporates the main drivers of these costs to improve the rounding values used by the company. The model the team created considers the trade-off in efficiencies of different rounding values to minimize total supply chain cost.
To validate the model, the team implemented a six-week pilot of 2,700 rounding value changes. An inventory investment of $2M was reduced by over $180,000 while warehouse handling costs decreased by 33%. The pre-pilot service level was still maintained following the change. Having validated the model, the team implemented changes to the remaining $31M of inventory investment in self-manufactured products. These changes will result in a 2% inventory investment reduction and savings of ~ $640,000 from annual handling and inventory carrying cost reductions.
Finally, the team identified opportunities to scale the model to CAH's supplier-sourced products, hospital deliveries, and sales to distributors. CAH can expect a 3% decrease in inventory investment as well as an annual handling and inventory carrying cost reduction of $7-10M from these opportunities. Additionally, CAH's supply chain partners can expect a 3% decrease in inventory investment, along with an annual handling and inventory carrying cost reduction of $4-8.5M. The team validated these estimates by applying the model to a representative supplier, Becton Dickinson, and a representative hospital, Aurora Healthcare.