Helen Xue Company Background OM Problems & SG's Solutions Our Solutions and Recommendations Private, midsize company 2009: $86.3 million in net sales, $6.5 million in net earnings 3,000 Standardized Products + Custom Glassblowing Services Laboratory & Research Facilities Specialized glassware for Global Scale 3 to 5% annual growth Competition Large Competitors Small Competitors Full range of lab equipment Specialized glassware Limited range of lab equipment Broad range of glassware Scientific Glass, Inc. More creative product designs Lower lifecycle costs 1. Customer Service Levels 2. Customer Responsiveness 3. Inventory Control & Management External etchings on glassware that change colors at different temperatures More industrial quality-control labs Oversaturated North American and European markets More low-end competitors Trends Reduce the amount of time between Industry 92% Service Level SG Currently 93% Service Level Differentiate by having the highest possible service level Receiving an Order Delivery of the Product SG's Solution 99% 2 Warehouses Waltham, Massachusetts Phoenix, Arizona +6 leases 8 Warehouses SG's Solution Direct Sales Force US & Canada Europe & Asia Pacific Distribution Sales Representatives Not a satisfying solution since previous expansion showed little results 1, 2, or 8 Warehouses? Rising shipping costs & inventory holding costs Need to improve warehouse processes 1) Improve order
fulfillment times 2) the # of customer backorders. 3) # of
times the sales team needs to get involved to track down or attempt to expedite delayed customer orders 4) inventory turns SG's Solution Policy Changes Eliminate Trunk Stock Number of warehouses 1 2 3 Recording Documenting Performing physical audits of the inventory Disapproval from salespeople Centralize into 1 warehouse, 2 warehouses, or 8 warehouses: Outsource their order-fulfillment and inventory-control (warehousing functions) What we focused on solving Part A Part B Reorder Point Safety Stock Inventory Level Economic Order Quantity Based on the Policy for 99% Service Level We Recommend: Recentralizing the North American warehousing function More shipping fees Insignificant when compared to the amount of inventory cost they will save x8 x2 x8 x2 x2 x2 x8 x8 Pool its inventory & reduce stand deviation of demand Reduces safety stock they have to carry each order period The End