Co-ordinating flows across supply chains in the low volume gas turbine industry

Abstract

The industrial gas turbine (IGT) market is experiencing exponential growth where competition is based upon technical performance and time to market. Product sales are limited by the ability of the Original Equipment Manufacturer (OEM) to coordinate manufacturers and assemblers to deliver turbines to customers in a timely manner. The company's logistics and supply chain systems have evolved from a traditional low volume job-shop environment and must now cope with a marked increase in product demand. OEM's must now manage the manufacture and assembly of thousands of turbine parts across an international and complex supply chain in a robust and agile manner. This requires the effective integration of internal and external logistics, supply chain and engineering talent. Current performance has been plagued with poor sourcing reliability, low quality and exploding lead times. This has resulted in sluggish response to customer demand and loss in earnings. This thesis seeks to recommend inventory placement strategies to improve sourcing reliability while identifying root causes and recommending improvements. It will also address the importance of the time-value of material in addressing investment and materials management decisions.