Chabot Wallpaper Analysis
Cavanaugh, Dunn, Powell
1
Agenda

Introduction

Manufacturing

Transportation/Service

Inventory

Summary
Introduction
Manufacturing
Transportation/
Service
Inventory
Summary
2
Major Problems

Long production runs

Poor service from contracted carrier

High inventory levels
Introduction
Manufacturing
Transportation/
Service
Inventory
Summary
3
Manufacturing
Introduction
Manufacturing
Transportation/
Service
Inventory
Summary
4
Streamline Manufacturing Process

Postponement at the Tennessee
manufacturing plant

Hold inventory earlier in the supply chain
◦ Work in Process vs. Finished Goods

Helps to create a more responsive supply
chain
Introduction
Manufacturing
Transportation/
Service
Inventory
Summary
5
Current Manufacturing Process
Introduction
Receive Order
Packaging
(1 day)
Prepare
Substrate
(21-28 days)
Printing
Pattern/Design
(2 days)
Apply Paste
(1 day)
Change Over
Line
(12 hours)
Manufacturing
Transportation/
Service
Inventory
Summary
6
Proposed Manufacturing Process
Introduction
Prepare
Substrate
(21-28 days)
Packaging
(1 day)
Apply Paste
(1 day)
Print
Pattern/Design
(2 days)
Receive Order
Changing Over
Line
(12 hours)
Manufacturing
Transportation/
Service
Inventory
Summary
7
How To Improve Lead Time
Manufacturing Process Lead Time
25.5 days
Current Process
3.5 days
Proposed Process
0
Introduction
Lead Time
Variation in Lead Time
7 days
10
20
30
Time (Days)
Manufacturing
Transportation/
Service
40
Inventory
Summary
8
Transportation/
Service
Introduction
Manufacturing
Transportation/
Service
Inventory
Summary
9
How To Improve Transportation

FOB Destination/Freight Prepaid
◦ Change freight terms to FOB Origin/Freight
Collect if customer’s transportation is cheaper

Build relationships with more than one
carrier
◦ Contingency planning
Introduction
Manufacturing
Transportation/
Service
Inventory
Summary
10
Inventory
Introduction
Manufacturing
Transportation/
Service
Inventory
Summary
11
Inventory Solutions

ABC Analysis on item turnover rates
◦ Reduce case sizes for B and C items
◦ More responsive supply chain enables us to
ship more A items to keep up with demand
Introduction
Manufacturing
Transportation/
Service
Inventory
Summary
12
ABC Analysis
Turnover Rates of Items
7
5
4
3
2
1-2 Turns
5-6 Turns
Turns Per Year
6
1
0
Top 20%
Introduction
Next 30%
Items
Manufacturing
Maximum Turnover
Minimum Turnover
<.5 Turns
Bottom 50%
Transportation/
Service
Inventory
Summary
13
Tradeoffs

As case sizes decrease…
◦ Packaging and handling costs increase
◦ Customer service levels increase
◦ Obsolescence costs decrease
◦ Inventory costs increase for Chabot, but
decrease for retailers
Introduction
Manufacturing
Transportation/
Service
Inventory
Summary
14
Summary
Introduction
Manufacturing
Transportation/
Service
Inventory
Summary
15
Summary

Postponement is key to increasing customer service
◦ Lead times will decrease

Improve carrier strategy to be more responsive to
customer needs

Reduced inventory levels lead to better customer
service

Customer service is at the heart of everything you
do
Introduction
Manufacturing
Transportation/
Service
Inventory
Summary
16
Questions
17