IE 3101:

1

• IE 3101
• Supply Chain
• Modeling Project

Gita Ayu Damie Bartley Wendy Hsia Leon Liu Peter
Severa
2
Company Overview

• Media Packaging Company
• CD Jewel Cases
• DVD Cases
• Video, Audio packaging, etc..

3
Company Background

• Atlanta Precision Molding
• Japanese Owned
• Palladium - Nexpak
• 4th Largest Injection Molding Company
• Largest Supplier of Media Packaging for Audio and
  Video formats

4
Company Background

• Competitors Acquired
• Joyce Molding
• Alpha Media Packaging
• Mercury Foam
• Competitors
• Viva
• Tritex Magnetics
• Shape (bankrupt)

5
Supply Chain Flow-Chart
Purchasing
Engineering
Customers
Raw Material Levels
Customer Orders
Sales
Materials Requirements
Suppliers
Shipping
Customer Orders
Shipping Quantities
Customer Orders
Logistics
Raw Materials
Finished Goods
Inventory Allocations
Inventory Levels
Shipping Quantities
Manufacturing
Consignment
Inventory
Finished Goods
Materials Flow
Information Flow
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Suppliers
Suppliers
Purchasing
Manufacturing
Logistics
Shipping

• Chevron, Dow, and Nova Chemicals
• Polystyrene
• Benzene and Ethylene
• Gas Prices
• Price increased by 100 since January 2000
• Chesapeake, VA
• Shipped by barge

7
Purchasing
Suppliers
Purchasing
Manufacturing
Logistics
Shipping

• Raw Materials
• Delivered by truck daily
• ROP is one to two days stock
• monthly projection adjusted daily
• 24 hour Safety Stock
• Use Push Pull method
• Suppliers use 3-month projection
• NEXPAK has control to change deliveries
• Lead time is 10-14 days

8
Manufacturing
Suppliers
Purchasing
Manufacturing
Logistics
Shipping

• Polystyrene
• General Purpose
• Clear Trays
• High Impact
• Tray Inserts

9
Manufacturing
Suppliers
Purchasing
Manufacturing
Logistics
Shipping

• Efficiency
• ¼ million lbs per day
• 70 million lbs per year
• 1.1 billion products per year
• 1.5-3 product is scrapped
• Control software used to monitor polystyrene
  levels

10
Manufacturing
Suppliers
Purchasing
Manufacturing
Logistics
Shipping

• Product Mix
• NEXPAK produces five different products
• DVD cases will start production in January 2001
• additional three machines

11
Manufacturing
Suppliers
Purchasing
Manufacturing
Logistics
Shipping

• Storage of Product / Packaging
• Palettes
• 42x42
• 40x40
• Shelf Life
• 2-3 Months

12
Manufacturing
Suppliers
Purchasing
Manufacturing
Logistics
Shipping

• Capacity
• Atlanta facility is largest
• 221,000 sq. ft
• 140 Employees
• 101 Injection Molding Machines
• Fully Automated Production Line
• 76 Machines on Slow Line
• 25 Machines on Fast Line
• Current output averages 1.5 million trays / day
  (3.3 million pieces)

13
Manufacturing
Suppliers
Purchasing
Manufacturing
Logistics
Shipping

• Special Orders
• Two week lead time
• Higher production cost
• Requires special mold to be made
• Cost of special mold is absorbed by Nexpak

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Manufacturing
Suppliers
Purchasing
Manufacturing
Logistics
Shipping

• Quality Assurance for Customer Service
• Customer reported defects
• Warpage
• Packaging
• Inspection occurs every four hours
• One bundle is inspected per machine for 20-30
  criteria
• Visual Defects
• Physical Defects

15
Logistics
Suppliers
Purchasing
Manufacturing
Logistics
Shipping

• Seasonal Demand Pattern
• No problem with stock-outs
• No production is outsourced

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Logistics
Suppliers
Purchasing
Manufacturing
Logistics
Shipping

• Inventory
• 2-3 weeks held on-site
• 10-15 million units
• Two offsite inventory locations
• Long-term
• Consignment Warehouse
• Logistics International

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Logistics
Suppliers
Purchasing
Manufacturing
Logistics
Shipping

• Logistics International
• Floor space and time based fees
• Only pay for space that is used
• Provide carrier service

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Shipping
Suppliers
Purchasing
Manufacturing
Logistics
Shipping

• Ships full truckloads
• LTL shipping occurs very infrequently
• Shipping to Europe done by sea
• Only done if European facility cannot meet demand
• Order cut-off time is 1pm ET

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Shipping
Suppliers
Purchasing
Manufacturing
Logistics
Shipping

• Distribution
• 10-30 different locations per month
• 3-4 Truckloads per location per day
• Main distribution center in Indiana under
  consideration
• Atlanta Facility
• 10-20 truckloads daily for pre-holiday season
• 6-8 truckloads daily during the off-season

20
Customers

• Sony
• Warner Brothers
• Seagram's
• BMG
• 20 Smaller companies
• TDK, EMI, JVC ...

21
Questions?