Site Material Supply Chain Optimization

Abstract

A warehousing product traditionally falls under the category of “project-based” management due to heavy construction, multi-locational delivery, and relatively low production numbers. A different approach for material procurement and delivery must be taken in light of today’s supply chain environment to sustain the high rate of delivery demanded of a leading company in this field.

This thesis explores alternates to a project-based supply chain model as well as an evaluation of the “central warehouse” inventory model originally proposed by the company. The focus is on setting an inventory strategy for a product that is somewhat repeatable, but constructed in a unique location for each delivery and not built in a traditional assembly line.

Applying the methods of multi-echelon demand analysis, “physics of time”, and creating a standardized method for risk and impact assessments, a basic framework is created that a company in this unique situation can follow to set an initial inventory strategy. The framework is applied to this company as a case study.

The strategy and amount of inventory proposed using this method significantly reduced inventory and associated storage costs compared to the central warehouse proposal, and will ensure more robust material availability than the current “project-based” ordering approach.

The implications of this work to the wider industry are a proposed method for situations of high-growth, minimal historical demand data, and product delivery that is in between high-rate assembly line and one-off construction projects.