Global supply chain design and optimization methodology

Abstract

The work for this thesis was performed at Honeywell in the Automation and Control Solutions (ACS) division. The project focuses on ACS's manufacturing strategy regarding its global supply chain design, primarily discussing the manufacturing growth opportunities available in emerging regions. Honeywell ACS's current methodology for the development of a long-term manufacturing strategy is based on growth and total cost reduction objectives. In order to comprehend the total cost of the manufacturing strategy, considerations such as inventory, logistics and duties, outsourcing and material sourcing are evaluated. The project also considers a factory's geographical location and ACS's year-by-year implementation plan. An outcome of this Honeywell project and the basis of this thesis is the development of a general supply chain design and optimization methodology that utilizes three analytical tools (Country Selection Framework, Total Cost Model and Implementation Plan Process) that are capable of validating the supply chain design of any company. The analytical tools can be used to verify key strategic supply chain decisions or to create a baseline manufacturing strategy. The following results can be determined using this supply chain design methodology: Determine an appropriate operating region for current or future business needs; Evaluate the feasibility of factory relocation projects by considering all relevant costs; Evaluate the cost implications of the supply chain structure by considering logistics, inventory and material sourcing costs; Understand the impact of outsourcing on the manufacturing strategy; Recommend a year-by-year implementation plan in the case of multiple projects and limited capital resources.