Supply chain management for fast-moving products in the electronic industry

Thesis (S.M.)--Massachusetts Institute of Technology, System Design and Management Program, 2006.Includes bibliographical references (leaves 71-72).The objective of this Thesis was to strategically redesign and transform the supply chain of a series of detonators in a leading Company serving the oil and gas industry. The scope of the Thesis included data gathering and analysis, and the proposal and implementation of possible solutions. The issues addressed included sourcing and partnership strategies and development of systemic inventory management policies. We optimized the inventory policies to minimize the ordering and holding costs while improving the customer service level. For this purpose, we considered the entire supply chain starting from the Company's internal and external suppliers and Subcontractors all the way to the end-customers. By considering all these players we were able to globally optimize the supply chain. The inventory policy used was a periodic review policy for which we optimized the reorder, order-up-to level and Safety Stock levels. We analyzed the effects of the forecasting error and the potential benefits of risk pooling.(cont.) We also identified and recommended a new push-pull boundary for the Company's detonator products and provided a generic platform to identify this boundary for other products within the Company. The supply chain management system and managerial insights developed from this project can potentially be extended to other products and divisions within the Company.by Konstantinos F. Zafiriou.S.M