Stephen M. Ross School of Business
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Spotlight! 2003 Winners
First Place ($4250 per student)
Intel Corporation
Second Place - tie - ($3250 per student)
Pall Corporation
Alcoa Inc.
Third Place/Honorable Mention ($1,000 per student)
Colfax Corporation
Intel Corporation
"Supply Chain Balancing through the Creation of an Innovative 'Newsboy' Inventory Model"
Student Team
Luke Leubuscher - MBA/MC
Johanna Lichtman - EGL (BSE-IOE & MSE-IOE)
Pinar Yaprak - EGL (BSE-IOE & MSE-IOE)
Project Liaison
James R. Kellso - P.E., Manager of Supply Network Strategy
Project Supervisor
Brenda Miller - Server Business Engagement Manager, Retail & System Manufacturing Distribution Solutions
Faculty Advisors
Mark Lewis - College of Engineering
Dennis Severance - Business School
Intel Corporation historically experiences great success in the semiconductor marketplace. However, Intel's recent movement into the server chassis market proved more challenging. Unlike the micro chip, a server chassis is a bulky low cost item that brings a new set of supply chain planning obstacles. Intel's server division chartered this TMI team with the task of driving down combined freight and inventory holding costs.
The team developed a tool to balance Intel's supply chain through enabling accurate inventory deployment and air freight decisions, given Intel's unique environment. Intel manufactures the server chassis in Asia and then distributes the product worldwide through warehouses in Hong Kong, The United States, and Europe. Ocean transport along these lanes can take up to four weeks. Air transportation is fast (1-4 days), but the high cost erodes most of the product's profit margin. Further complicating this system, fifty percent of customer orders require less than a fourteen day order to delivery time. Considering these dynamics, and the presence of thirty-five percent forecast error, the team created an inventory tool to dynamically handle these factors and create value for Intel.
The team found an innovative way to extend and modify the mathematics of the 'newsboy' inventory model. The model output greatly improved inventory deployment decisions while operating in an environment of high forecast error, long replenishment lead time, and significant demand variability.
Upon completion of the project the team successfully:
- Identified over $1.2 million for the first half of 2003 and projected an additional value of $1.9 million for the second half of 2003.
- Postponed inventory commitment decision by ten days (45% of planning lead time) creating higher responsiveness to variable customer demand
- Transitioned the model and the teams working knowledge to Intel management and inventory planners.
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Pall Corporation
"Asian Manufacturing Expansion Strategy"
Student Team
Ian Kummerlin - Dual (MBA/MC & MSE-IOE)
Slava Leykind - BBA/MC
Kirk Light - MBA/MC
Project Liaisons
Greg Scheessele - Senior VP Global Operations
Donna Winkelman - Director Human Resources
Project Supervisor
Greg Scheessele - Senior VP Global Operations
Faculty Advisors
Ravi Anupindi - Business School
John Cristiano - College of Engineering
The TMI Pall project team was assigned the mission of designing an Asian manufacturing expansion strategy that would allow Pall Corporation to meet the needs of growing Asian demand for their products as well as realizing significant savings by exploiting the low cost manufacturing environment in Asia. The strategy that the TMI team designed will also permit the company to rationalize existing capacities in order to maximize cost savings and allow their products to compete effectively on a global stage.
The project team designed a manufacturing strategy based upon qualitative and quantitative factors assembled in a framework of analysis designed specifically to align cost savings with strategic considerations. Financial analysis and product comparisons were
performed using a team-developed model that allowed the re-creation of various manufacturing scenarios and the impact that the defining factors had on overall profitability. In order to accomplish these goals, the project team collaborated with Western Hemisphere Plant leadership and Asian Country Managers in creating a current state map of Palls worldwide facilities. Market demands and other service-related issues were considered by working closely with Palls Line of Business managers. Through this process, the team facilitated discussions between the different functional areas of Pall in order to develop volume forecasts by market and product family while considering changing regulatory, political, and economic environments in the Asian region.
Finally, the TMI team presented a recommendations package and a five-year incremental implementation plan to the Senior Operating Committee where approval was granted for the expansion to begin. Implementation activities were then coordinated by the team for the initial stages of the expansion and transitioned to a Pall team composed of plant managers from the US, UK, and Asia.
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Alcoa Inc.
"Moving Downstream: Alcoa's New Business"
Student Team
Dan McMaster - MBA/MC
Mahshid Pirzadeh - EGL (BSE-IOE & MSE-IOE)
Nandu Srinivasan - MBA/MC
Project Liaisons
Mike Adkins - Market Manager, Aerospace
Robert Haley - Bombardier Aerospace Account Manager
Project Supervisor
Rob Herman - Senior Specialist of Industrial Engineering
Faculty Advisors
Sebastian Fixson - College of Engineering
Ted O'Leary - Business School
The opportunity:
What do you do when your customer offers to give you a multi-million dollar contract for new business over the next 10 years? What if this could increase market share by 15% in one of your most profitable business segments, providing an opportunity to move farther down the supply chain?
The catch:
Find a way to deliver Just-In-Time (JIT) in less than 24 hours to a new product estimated to take 20 weeks to produce. Do this at a lower cost than the past products that were not delivered via JIT. Do this while making an unbiased decision amidst pressure from distributors whose livelihood depends on your recommendation. Finally, convince the leaders of five organizations that your solution is the right one.
This was the challenge recently presented to the Alcoa TMI team by Alcoa Mill Products and Bombardier Aerospace in Montreal, Canada. The team was assigned the responsibility over an entire business, known as the "JIT Shaped Plate" business and was tasked with the following:
- Determine the most profitable service channel model among 9 distributors.
- Design a JIT supply chain that allows Alcoa to deliver within 24 hours at a reduced cost.
- Use this design to win the business from Bombardier Aerospace.
- Implement the system to support product delivery starting on January 1, 2004.
- Convinced senior management to implement a solution that went against the initial preferences of the company.
- Designed, tested, and implemented a JIT kanban pull system to deliver within 24 hours.
- Reduced overall inventory in the supply chain by an estimated 40%.
- Ensured on-time delivery on January 1, 2004, by enabling order fulfillment to support the supply chain.
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Colfax Corporation
"Finding Simplicity in Chaos"
Student Team
Keli Fleming - EGP (MSE-IOE)
Katie Kaltz - EGL (BSE-IOE & MSE-IOE)
Jodi Miller - BBA/MC & EGP (MSE-IOE)
Project Liaison
Robert Gates - Director, Colfax Business Systems
Project Supervisors
Hayward Summers - Operations Manager
Jean Weniger - Production Manager
Faculty Advisors
Semyon Meerkov - College of Engineering
Eric Svaan - Business School
Colfax Corporation, headquartered in Richmond, Virginia, is a $497 million Pump and Power Transmission manufacturing company with operations in over 21 countries worldwide. The TMI team worked at Formsprag Clutch, in Warren, Michigan, a subsidiary of the Colfax Power Transmission division. Formsprag's major capability lies in the production of overrunning clutches that are used in a variety of industrial, aerospace and ground-based applications such as conveyors, rotary wing aircraft and military tanks. The TMI team evaluated the Aerospace Value Stream whose main products are Sprag-Retainer clutches.
Aerospace products independently comprise approximately 30% of Formsprag's revenue and support customers such as Bell Helicopter, Boeing and Honeywell. The combination of intricate product design and strict quality constraints complicate production planning of the Aerospace clutch. The complicated production system results in excessively long lead times and poor on-time delivery (OTD). The goals of the TMI team included investigating and relieving capacity constraints, improving production scheduling and exploring floor layout opportunities. The team performed several implementations by gaining support of management, UAW operators and plant staff.
- Executed an extensive sequencing system to chronologically prioritize the production schedule and reduce overproduction.
- Led a Kaizen event that cellularized the major machining processes of the retainer line to enable better product flow and increase capacity at the bottleneck process.
- Implemented 5S organization of operator tools and equipment to introduce standardization and reduce setup times.
- Relocated and rearranged raw materials to eliminate waste and control raw material inventory.
- Executed an order tracking system that incorporates Voice of the Customer for accurate lead-time reporting and improved customer on-time delivery. The team generated significant tangible results including lead-time reduction and improved service levels. These results were achieved through data-led implementation, as well as team-facilitated communication between plant operators and staff. As a direct result, Formsprag now has an increased flexibility to quickly respond to customer requests and a culture that will accept future lean initiatives.
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