EliteClean International Logistics Strategies Essay

EliteClean International Logistics Strategies - Essay Example These techniques are used to detect areas of non-value adding processes otherwise defined as waste so that the necessary steps can be taken to eliminate them. One of these techniques is value stream mapping. Value stream mapping According to Mangier (2003) value stream mapping is a technique of creating a â€Å"one-page picture† of all the processes that take place in a company. This is the process from the time a customer places an order for a product until the customer has received the product at their location. The aim of value stream mapping is to illustrate the flow of material and information across and throughout all the processes that add value from the stage of production to shipment to the customer. Value stream maps documents both value-adding and non-value-adding processes from production to shipment. In creating the value stream map business and manufacturing waste can be easily identified and thus becomes the basis on which improvements can be made to the company ’s operations. Mangier (2003) indicates that there are four steps involved in value stream mapping. They are i. Defining the product or product family; ii. Creating the â€Å"current state† value stream mapping (CSV); iii. ...   The dishwasher line is manufactured in South Korea; the laundry product line in China; and the range cookers in Thailand. The value stream map for EliteClean is shown below. Figure 1 – Current State Value Stream Map In Figure 1 above a number of activities leading to the production of items are duplicated. There are several persons carrying out procurement activities. Instead of the head office obtaining information on materials required for production, the factories are allowed to do their own procurement. This procurement is carried out by the factory manager in the case of laundry and the chief production engineer who may delegate it to a production manager at the other factories. There are several trucks of raw material going to the three different factories. Some of these trucks carry similar items which are purchased separately by the three different factories. Elite Clean has employed a push-based supply chain strategy. The factories which are located in South Korea , China and Thailand produce items without any knowledge of demand and ship them to the regional distribution centers (RDCs). These distribution centers are located in Birmingham in the UK, Jordan in the Middle East and Chicago in the USA. There is a capacity problem at the RDCs due to the fact that there are too many inventory items in stores. There is some concern that some of these items may become obsolete. There is a cost involved in holding inventory. Additionally, when the storage facilities are too packed there will be a problem moving out inventory on a first-in-first-out basis. Items are not transported to the distribution centers based on demand.