Implementing novel inventory controls and weighing the costs and benefits of supplier managed inventory (SMI) in a consolidated manufacturing center

The Largo manufacturing site of the Raytheon Company is a pure production facility with limited collocated design capabilities. All of the initial design and development engineering is done in four external sites - Marlborough, MA; St. Petersburg, FL; Towson, MD; and Ft. Wayne, IN - before final specifications are "thrown over the wall" to Largo for production. Because manufacturing is geographically sequestered there are numerous organizational and informational disconnects. Accountability is not easy with four distinct program management offices; each has equally distinct incentives and needs, and expects stellar results from the Largo production staff. Materials normally account for approximately 75% of the total costs for a standard manufacturing operation. Largo is no different; however its material costs are often even higher than this benchmark for unique reasons. Difficulties arise for Largo in structuring its supply chain agreements because the four design sites have disparate material requirements and harbor unique supplier preferences. A salient symbol of the challenges faced by the site's supply chain management group is the millions of dollars worth of inventory that sits in the vast factory storeroom. Current inventory floor accuracy is at an unacceptable level of 85.3%.

Department dc:contributor.department

Leaders for Manufacturing Program at MIT

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2006

Author dc:creator

• Ducharme, Colin

Advisor dc:contributor.advisor

• Roy Welsch and Joel Clark.

• Materials Science and Engineering.
• Sloan School of Management.
• Leaders for Manufacturing Program.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/36220

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/36220