(Supply Chain Logistics Management 444)

To avoid material shortages and thereby maximize production, DEP normally maintains a 7-day supply of each compound. An earlier attempt at JIT manufacturing was abandoned after DEP experienced material shortages and production shutdowns. As a result, the man- ufacturing department is opposed to any reimplementation of JIT-type concepts.

The manufacturing department is electronically linked to the procurement and market- ing/sales departments. Marketing/sales receives customer orders by phone or facsimile. The orders are then entered into the information system. This allows manufacturing to monitor incoming materials shipments as well as schedule production runs. Under this system most customer orders are produced within 6 to 8 days of order.

Following production, orders are immediately sent to a warehouse a short distance from DEP. At the warehouse shipping personnel verify manufacturing tickets, match the manufac- turing ticket with the purchase order, and prepare shipping documents. Once the shipping doc- uments are completed, the order is prepared for shipment (e.g., palletized, shrink-wrapped) and labeled. Once a shipment is labeled, delivery is scheduled. Three to 6 days normally elapse from the time an order leaves manufacturing until it is shipped from the warehouse.

Market distribution is divided between the private DEP truck fleet and common car- riers. The majority of DEP’s customers are within a 200-mile radius. DEP trucks service these customers via twice-a-week delivery routes. Customers beyond this delivery zone are serviced through common carriers; delivery time fluctuates according to location and distance but rarely exceeds 6 days from time of shipment.

Prepare a case analysis for Case 1 and answer question1/prepare diagram at the end of case 1 (include as an appendix to the case).

1. Diagram the DEP/GARD supply chain. What stages are adding value? What stages are not?