tire supply chain
Post on 21-Mar-2017
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CURRENT SUPPLY CHAIN ENVIRONMENT
Anders ReedStephen HoynackiJustin Juback
CUSTOMER TRANSACTION MODES
• Retail • Catalog• Internet• Person-to-person
MICHELIN MANUFACTURING PLANTS
• Ft. Wayne, In
• Covington, IN
• Louisville, KY
• Ardmore, OK
• Asheboro, NC
Norwood, NC Greenville, SC Columbia-Lexington, SC Dothan, GA Tuscaloosa, AL
WAREHOUSE LOCATIONS
• Detroit, MI
• Jacksonville, FL
• Charleston, SC
• San Jose, CA
• Seattle, WA
• Cincinatti, OH
TRANSPORTATION USED
• Trucking• Trains
PACKAGING USED• Bar codes
• Minimal packaging material used
• Easily packable and stackable for transportation
• The minimal packaging material makes the tires very easy to wearhouse
LEGAL CONSTRAINTS• Freight weight• Driving hours• Damaged goods responsibility
TRANSACTION SUPPLY CHAIN DESIGN
BUYER BEHAVIOR = SPECIALTY
• Customers want the tires to align with their specific needs and wants
• It’s not a good that can be found anywhere and with extreme ease
• Consumers have to research the product and shop competitors
• It is a high involvement purchase process
MARKET COVERAGE = INTENSIVE
• Sell the tires at as many locations as possible to create brand awareness
• Everyone needs tires so it’s a product that needs to be everywhere
CHANNEL STRUCTURE- INDIRECT• Michelin does not have stores to sell it’s tires
• Different ways utilized to sell products Retail Catalog/Mail Internet Other (person to person)
OWNERSHIP
• Michelin is corporately owned
• They are publicly traded
• The business is viewed as an entity of it’s own in the eyes of the law
SUPPLY CHAIN CONSTRAINTS• Little to no constraints
• Non-perishable product
• Can be manufactured and transported any time of the year
• Price per unit isn’t high enough to rule certain transportation methods out with concern for damage
• However, tires are very heavy so the units/load ratio would possibly decrease and costs would increase
LOGISTICS SYSTEM DESIGN
PLANT DC LOCATIONS
• Our global network supports the Mid-Michigan market
• Importing goods from other countries
• Michelin doesn’t manufacture in Mid-Michigan
• Headquarters are located in Greenville, SC
TRANSPORTATION USED
• Truck • Railway • Plane• Vessels
INVENTORY STRATEGY = SPECULATION • Savings created through leveraging economies of scale
• Delivered finished goods in bulk
• Reduced logistics costs through optimal uses of resources like trucks and warehouses
• Inventory costs would normally increase using this strategy, but our inventory doesn’t experience obsolescence
PACKAGING • Bar codes• No packaging
POST-SALE SUPPORT
• Returns are handled by 3PL’s
• Repair and return locations would be at dealerships and in stores where the tires are sold.
• If the return is because of faulty product specifications the store returns the tires to the supplier.
• Waste disposal
• End-of-life tires go back to manufacturing plants where the recovery process is handled
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