W. P. Carey School of Business
MBA Supply Chain Management Specialization
2006-2007 Corporate Projects
1. Avnet Logistics: Avnet Logistics Transportation Business Improvement and Market
2. Black & Decker: Inventory Management Strategy Model
3. Diageo: Wine Grape Supply Analysis
4. The Hartford Financial Services Group: Variable Staffing Strategy
5. Honeywell Aerospace – Global Strategic Sourcing: Supply Chain Services Tool-kit
6. Jazz Semiconductor: Freight Cost Reduction Program
7. Motorola, Inc.: Direct To Retail Strategy
8. Pulte Homes Inc., and Pulte Building Systems, LLC: Supplier Measurement Strategy
9. Raytheon Space & Airborne Systems: SAS Logistics Outsourcing Strategy
10. Temple-Inland: Should-Cost Model Analysis
11. VF Corporation: Free Trade Zone Analysis
Company/Division Avnet Logistics
Project Title Avnet Logistics Transportation Business Improvement and Market Opportunities
Project Problem or Avnet, Inc., a Fortune 500 company (NYSE: AVT), is one of the world's largest B2B
Opportunity distributors of semiconductors, interconnect, passive and electromechanical components,
(Describe the “value enterprise network and computer equipment, and embedded subsystems from leading
proposition” for this manufacturers. Serving customers in 70 countries, Avnet markets, inventories, and adds
project. That is, explain value to these products and provides supply chain management and engineering services.
why it is worth doing.)
NOTE: See Avnet_First.pdf and Avnet-Vertical_Markets.pdf for additional information.
Avnet Logistics has a large transportation spend ($100M) across an established group of
transportation providers, customer clearance brokerages, trade compliance and freight
audit activities. Avnet needs ideas to drive substantial savings in the internal
transportation spend and would like to also develop a line of revenue from managing
transportation services for others.
Project Objectives • Identify main areas of potential to reduce transportation related costs
(for example, financial • Evaluate the potential of turning freight spend into a proactive market offering
improvements, quality • Identify transportation service customer requirements and gap analysis versus Avnet
improvements, supply capabilities to deliver those services.
Primary Project We are looking for your recommendations for how to reduce transportation related costs
Activities/Tasks and develop transportation services management as a line of revenue. Therefore, you
have flexibility in exactly what aspects of this you will focus on depending on what
appears to have the best prospects based on your initial analysis. We anticipate that you
will need to conduct the following activities:
1. Gather, analyze and characterize our current transportation spend in North America.
This will be done based on analyzing currently available Avnet data and interviewing
our people and possibly also some of our transportation providers. We will facilitate
access to our transportation providers.
2. Evaluate and make recommendations on including a standard freight offering free
with all Avnet shipments to customers.
3. Survey Avnet transportation vendors to characterize the services available, how those
services are delivered and any customer expectations that are typical for the industry.
We will facilitate access to our vendors for this survey.
4. Review available literature, web resources, and experts to identify potential
opportunities for transportation cost savings and transportation management services
that we could provide
5. Based on Tasks 1 through 3, assess in detail Avnet capabilities to deliver
transportation management services. This will include identification of potential
opportunities for transportation management services, metrics for assessing our
competitiveness with respect to providing these services, and an assessment with
respect to these metrics of our potential competitiveness in providing these services.
6. Based on Tasks 1 through 4, provide recommendations for transportation cost
reduction and management services that we could provide. Prepare a high-level
implementation plan for your recommendations.
Anticipated • Report on Avnet transportation spending, areas for potential expense reduction and
Deliverables recommendations regarding incorporating freight into our standard market offerings.
• Report on transportation services available from Avnet vendors, anticipated customer
requirements or differentiation points, Avnet capability strengths and gaps, and
specific recommendation for Avnet market entry as a transportation management
Special Requirements • Non-disclosure agreement
for Student Team
Company/Division Black & Decker Hardware and Home Improvement Group
Project Title Inventory Management Strategy Model
Project Problem or Black & Decker is a global manufacturer and marketer of quality power tools and
Opportunity accessories, hardware and home improvement products, and technology-based fastening
(Describe the “value systems. Our products and services are marketed in more than 100 countries, and we have
proposition” for this manufacturing operations in eleven countries. The Black & Decker Hardware and Home
project. That is, explain Improvement Group (BDHHI) is a $1.2B Division of Black & Decker comprised of
why it is worth doing.) Kwikset, Price Pfister, Baldwin Hardware and Weiser Lock.
BDHHI currently uses sku segmentation according to the APICS recommended model: A
80%, B 15%, C 5%. Current model dictates sku’s safety stock required levels to avoid
stock outs resulting in either fill rate or lead time customer issues.
Given that BDHHI is a high sku business with variables as finished goods sourced from
Asia v. made in North America resulting in lead times differences, low seasonality,
volatility in demand volume and mix and frequent new product introduction (NPI)
scenarios; this project requires development of an inventory management / safety stock
model (powerful analytical skills) strategy that will lead to 20% inventory reduction
opportunities and Distribution Centers (DC’s) space freed up while maintaining fill rate
flat at 98% across the business.
Project Objectives This project addresses an inventory/safety stock strategy analysis for Kwikset, Price
(For example, financial Pfister and Weiser with benefit analysis of the current inventory strategy versus
improvements, quality alternatives resulting in inventory safety stock reduction.
improvements, supply Results are expected to improve level of inventory/safety stock while maintaining fill rate
chain innovations, flat a 98%.
improvements in Areas to be considered include: sku segmentation, forecast volatility (volume and mix),
customer service). different lead time for sourced finished goods (SFG) v. make items.
Primary Project 1. Review the BDHHI current inventory/safety stock strategy. This will be based on
Activities/Tasks interviewing appropriate BDHHI personnel and reviewing any written policies.
2. Collect, analyze, and summarize representative sales, customer requirements by
channel, ordering pattern, lead time, fill rate, inventory financial reports, safety stock
reduction impact on total inventory hypothesis. This will be done by interviewing
BDHHI personnel, and reviewing internal reports and other documentation. We
anticipate that this will result in maps of our overall sales, sku mix, sku segmentation,
lead times and fulfillment process.
3. Review literature, web resources, and experts to identify best practices/tools that are
relevant to inventory optimization strategies.
4. Based on Tasks 1 through 3, identify sku segmentation opportunities that would
impact inventory levels positively.
5. Develop inventory recommendation model showing alternatives or improvements to
the sku segmentation currently used. This will be done by comparing practices
identified in Task 4 in terms of their impacts to inventory metrics, as well as
implementation issues and feasibility
a. Estimate the approximate value propositions (impact and effort) for each
b. Prioritize the opportunities based on potential impact relative to the effort to
c. Perform a more detailed analysis of the impact and implementation effort
for the highest priority opportunities identified in Tasks 5a and 5b.
6. Prepare recommendations for those opportunities identified in Task 5, including a
recommended implementation order and high level implementation plans.
7. As time permits, implement attractive “quick hits” or perform pilots where feasible.
Anticipated • Summary and map of the current state of BDHHI’s inventory management process,
Deliverables including a summary of safety stock, fill rate, lead time and any other metric
anticipated to change as a result of this project
• Inventory management model that can be run based on the sku family characteristics
described above and that is capable of being refreshed as volume, mix, order
variability and lead times change.
• Overall list of inventory reduction and process improvement ideas
• Prioritized list of opportunities with supporting analysis
• Recommendations with implementation plans
• Preliminary results of quick hits and pilots where implemented
Special Requirements • Possible non-disclosure agreement
for Student Team • Approximately two trips will be made to Lake Forest, CA (Orange County/Los
Company/Division Diageo, Chateau & Estate Wines, Napa, CA
Project Title Wine Grape Supply Analysis
Project Problem or Diageo is the world's leading premium drinks business with an outstanding collection of
Opportunity alcohol beverage brands across spirits, wine and beer categories. These brands include:
(Describe the “value Smirnoff, Johnnie Walker, Guinness, Baileys, J&B, Captain Morgan, Cuervo, Tanqueray,
proposition” for this Crown Royal and Beaulieu Vineyard and Sterling Vineyards wines. Diageo is a global
project. That is, explain company, trading in over 180 markets around the world. The company is listed on both
why it is worth doing.) the London Stock Exchange (DGE) and the New York Stock Exchange (DEO). We
employ over 20,000 people worldwide with offices in around 80 countries. If you would
like to find out more about Diageo please check out the following links:
Year-to-year grape crop fluctuations often create an oversupply of wine across the
industry. Long-term grape supply contracts place the wine companies in an oversupply
position after large harvest years. The losses associated with the excess wine have a
significant impact on financial performance. The challenge is to take a potential liability
in oversupply and convert it to a business advantage, as well as build a strategic plan to
hedge against future oversupply risk.
Project Objectives 1. Recommend the most cost effective sourcing strategy that allows Diageo to meet our
(for example, financial sales forecast requirements while hedging against oversupply risk.
improvements, quality 2. Recommend the most cost effective strategy to deplete current oversupply.
Primary Project 1. Analyze current bulk wine and grape market for key grape varietals. This will be
Activities/Tasks done by analyzing data and forecasts available from public sources or that we
provide, supplemented by interviewing our internal experts
2. Review existing grape supply agreements and current wine inventory. We will
provide the necessary reports to do this, or will provide you access to our records and
systems so that you can develop the necessary information
3. Review available literature, web resources, and experts to develop potential
alternative approaches to meeting our forecast requirements while hedging against
oversupply. As part of this task, develop appropriate metrics for assessing how good
the different approaches are.
4. Based on Tasks 1 through 3, develop a recommended approach to balance our future
requirements vs. current supply. Ideally, we want an approach that will deplete our
current oversupply while ensuring that we will meet future requirements and not
have a significant oversupply or undersupply. Your recommendation should include
an analysis of the expected NPV and risks associated with your approach.
5. Develop a high-level implementation plan for the recommended approach.
Anticipated - Analysis of the current bulk wine and grape market for key grape varietals.
Deliverables - Review of our existing grape supply agreements and current wine inventory.
- Recommended strategic options for sourcing grapes and bulk wine to meet market
demand, including a NPV and risk analysis of each option that is considered.
- High-level implementation plan for your recommendations
Special Requirements Non-disclosure agreement; one or two trips to Napa, California
for Student Team
The Hartford Financial Services Group
Founded in 1810, The Hartford Financial Services Group, Inc. (NYSE: HIG) is one of the
largest investment and insurance companies based in the United States, with offices in
Japan, Brazil, Ireland, England, and the United States. With nearly 30,000 employees and
$2.3 billion in income in 2005, The Hartford was ranked 78th on the 2006 Fortune 100
list. The Hartford is a leading provider of investment products – annuities, mutual funds,
college savings plans – as well as life insurance, group and employee benefits,
automobile and homeowners' insurance, and business insurance.
Enterprise Commodity Management
Enterprise Commodity Management (ECM) is a centralized department that manages
various Indirect Spend commodities that The Hartford purchases to support the on-going
business. The ECM group is engaged in leveraging the organization’s buying power to
obtain goods and services at better terms and conditions over the life cycle of those goods
and services. ECM currently has about $220 million in annual spend including the major
categories as follows: Staff Augmentation ($75 million), Postage ($75 million), Print
Procurement ($35 million), Office Services ($35 million)
Project Title “Variable Staffing Strategy”
Project Problem or Opportunity
Opportunity Develop an effective Variable Staffing model for The Hartford
(Describe the “value
proposition” for this Description
project. That is, explain The Hartford spends more than $200MM annually on Staffing category. Staffing refers to
why it is worth doing.) hiring people to supplement the manpower needs of the organization.
The Hartford would like to conduct an in-depth review of the Staffing spend and its
related practices to allow for flexible or variable staffing strategy whereby The Hartford
can quickly add manpower to implement projects and reduce staffing when project is
completed. The Hartford has four channels through which staffing happens – In-house
consultancy services, Contract agency staffing, Offshore and Full-time hire. The Hartford
would like to develop an effective variable staffing strategy to determine which type of
labor to use among the four channels. Variable Staffing shall be limited to the IT space
and shall not include staff augmentation (clerical, admin jobs etc).
Project Objectives The Hartford would like to explore and develop Variable Staffing strategies to:
(for example, financial
improvements, quality 1. Create cost savings by streamlining the staffing operations to affect at least 10% of
improvements, supply the overall spend
chain innovations, 2. Create an environment for Staffing managers to pick resources from the four
improvements in channels based on TCO analysis
customer service). 3. Reduce the overall cycle time and total cost associated with staffing from the
4. Develop a decision model for choosing manpower from the four channels
Primary Project 1. Identify and understand the four channels of spend. This will be done by
Activities/Tasks interviewing personnel from The Hartford, and possibly also staffing contractors.
We anticipate that the result will be process maps that describe how staffing is done
through the four channels.
2. Collect and analyze data on the four channels. We will provide the data, and the
analysis will be used along with the results from Task 1 to identify gaps in our
current variable staffing processes, and potential improvements.
3. Based on Tasks 1 and 2, review and standardize job templates and descriptions to be
used as a basis for improving our variable staffing processes. As part of this task,
review literature, web resources, and experts to identify best practices for this type of
4. Using your results from Tasks 1 through 3, develop and prototype a Total Cost of
Ownership model to allow decision making for variable staffing. We anticipate that
this will include a recommended process flow and a prototype spreadsheet analysis
5. Develop a high-level implementation plan for your Task 4 process and tool.
Anticipated 1. Description of our current process flow for variable staffing.
Deliverables 2. Analysis of industry best practices
3. Prototype Total Cost of Ownership model
4. Decision process to support improved variable staffing
5. Recommendations for how to put the recommended variable staffing process into
Special Requirements 1. Non-Disclosure Agreement
for Student Team 2. Students do need to travel approximately 2-3 times to The Hartford based in
Hartford, Connecticut to do interviews, collect data, understand the process flow, and
make presentations. Students have the flexibility to start the project early and finish
early so that the travel requirement does not affect the school work. For example,
students can visit the company during the winter break and spring break.
Company/Division Honeywell Aerospace – Global Strategic Sourcing
Project Title Develop a Supply Chain Services tool-kit that will enable sites Honeywell-wide to
implement best-in-class supplier service models
Project Problem or Honeywell International is a diversified technology and manufacturing leader, serving
Opportunity customers worldwide with aerospace products and services; control technologies for
(Describe the “value buildings, homes and industry; automotive products; turbochargers; and specialty
proposition” for this materials. Honeywell (NYSE: HON) is one of the 30 stocks that make up the Dow Jones
project. That is, explain Industrial Average and is also a component of the Standard & Poor’s 500 Index.
why it is worth doing.) Honeywell Aerospace delivers a diverse range of commercial and defense and space
products, systems and services across the aerospace industry.
Of Honeywell’s over 200 site locations, less that 10% are taking advantage of no or low-
cost supply chain services offered by our strategic suppliers. Specifically, Electronics
Distributors such as Arrow and Avnet offer consignment programs, bonded inventory,
electronic data interchange systems (EDI), in-plant stores, etc., at no or minimal cost to
We do not take advantage of these services partly due to the lack of understanding at the
site level as to what services are available and what dollar value, part mix, site support,
etc. are required for a given supply chain service.
With limited site level resources to manage material, using suppliers to drive the supply
chain becomes increasingly important. Better supply chain management will lead to
significant cost reductions and improvements in cash flow.
Project Objectives Implementing a Supply Chain Services tool-kit will enable our sites to use supply chain
(for example, financial services offered by our strategic suppliers at little or no cost leading to:
improvements, quality 1. Significant cost reductions by minimizing broker buy and expedite fees
improvements, supply 2. Significant Cash Improvements due to less material held in Honeywell inventory and
chain innovations, more material held on consignment by our suppliers
Primary Project 1. Work with our 5 strategic electronics distributors to understand what supply chain
Activities/Tasks services are available, and to identify the business/site attributes required for each
service type. Honeywell will facilitate the necessary access to these distributors, and
it is anticipated that this activity will requiring interviewing and/or surveying
representatives of the distributors.
2. Review available literature, web resources, and experts to help assess the advantage
and disadvantage of utilizing the various no or low-cost services.
3. Assess the needs of Honeywell sites for the various available no or low-cost services,
and the types of process changes that would be necessary to take advantage of these
services. It is anticipated that this will require interviewing and/or surveying
appropriate people at selected Honeywell sites.
4. Based on Activities 1 through 3, make develop a tool-kit for Honeywell sites that will
guide them to the best supply chain service for their business. It is anticipated that
this tool-kit will consist of process descriptions, checklists, and/or spreadsheet tools
that can be used at a site to assess the available services, determine which ones
should be used, and guide users through the process of obtaining the services.
5. As time permits, launch the tool-kit in webinars and through documentation on our
Anticipated 1. Assessment of available no or low-cost supply chain services, and their potential
Deliverables value to Honeywell sites.
2. Stand-alone, documented tool-kit that will enable any site across Global Honeywell
to efficiently and effectively choose the best supply chain service for their business.
3. As time permits, webinars and website documentation to launch the use of the tool-
Special Requirements non-disclosure agreement
for Student Team
Company/Division Jazz Semiconductor / Supply Chain Management
Project Title Shipping/Transportation Cost Reduction
Project Problem or Jazz Semiconductor is a pure-play semiconductor wafer foundry that serves customers
Opportunity targeting wireless, optical networking, power management, storage, aerospace/defense
(Describe the “value and other high-performance applications. Headquartered in Newport Beach, California,
proposition” for this Jazz is a privately held company with over 800 employees and is located at the center of a
project. That is, explain thriving high-tech region in Newport Beach, California, that includes Conexant Systems,
why it is worth doing.) Mindspeed Technologies, and Skyworks Solutions with the University of Southern
California, Irvine and the John Wayne Airport nearby. Jazz is merging with Acquicor
Technology Inc., and further information about the merger and other aspects of Jazz is at
With more than fifteen years of expertise operating a world-class certified wafer
fabrication facility (ISO9001, ISO14001, ISO 27001), Jazz is well-positioned as a top
player in the high-performance foundry marketplace. Our expansive facility occupies
100,000 square feet and supports state-of-the-art Class 1 and Class 10 cleanrooms. The
foundry is capable of producing more than twenty thousand 8-inch wafers per month and
supports the manufacturing of process technologies down to 0.13-micron geometries,
while focusing on high performance technologies for mixed-signal and RF applications,
such as silicon germanium (SiGe), BiCMOS and RFCMOS, which accompany its
industry-standard CMOS offerings.
Jazz maintains low-cost manufacturing partnerships in Shanghai, China, with Advanced
Semiconductor Manufacturing Corporation (ASMC) and Hua Hong NEC Electronics Co.,
Ltd (HHNEC), expanding its capacity as well as its process offerings, providing
outstanding dual-sourcing. The opportunity for this project relates to material arriving and
shipping off to Jazz Semiconductor. The company is currently spending over $1.3 Million
a year on shipping costs alone (domestic and international). There is need of a freight cost
reduction program that could save the company at least 10%, and we believe this is
Project Objectives Project Objectives with Respect to our Supply Chain:
(for example, financial - Compare company's costs, operations, and services against industry benchmarks to
improvements, quality find the segments of our logistics services that should be improved
improvements, supply - Reduce shipping costs
chain innovations, - Identify hidden costs of transportation
improvements in - Improve vendor compliance routing guide
customer service). - Improve shipment visibility, freight tracing, and freight tracking
- Monitor carrier performance with respect to time in transit, service failure, and billing
Primary Project 1. Analyze our shipment activities including: traffic lanes and shipment volumes,
Activities/Tasks transportation characteristics of the materials and products that are shipped and
received, and freight terms The information used for this analysis will be from our
internal systems, from interviewing company personnel, or from other publicly
available information (for example, from carriers). This analysis will include:
a. Measure transportation costs, which provide the basis for ongoing rate
analysis and better results in negotiation with carriers.
b. Analyze commodity flows between domestic origins and destinations,
exports between domestic origins and foreign destinations and imports
between foreign origins and domestic destinations.
c. Conduct research on commodity flows and related freight transportation
activities for large items including: chemicals, semiconductor wafers and
2. Clarify appropriate metrics for us to use to assess carrier cost and performance. This
will be based on interviewing company personnel, as well as reviewing literature,
web resources, and experts. This will include assigning weighted values to service
and cost points that are most important to the company to assess service/cost
tradeoffs and help assure that the most appropriate and cost-effective carriers and
other service providers are identified to handle our business.
3. Using the results from Tasks 1 and 2, utilize Supply Chain Management Tools /
Methodologies to analyze and identify the best carriers for us to use based on our
Anticipated - From Task 1, provide benchmarking analysis that compares shipping rates, discounts,
Deliverables surcharges and other factors to current competitive standards in each transportation
- Report results to Senior Management, with carrier rankings that show the amount of
projected savings that can be realized with each carrier’s services, and provide
recommendations for improvements that will reduce cost while maintaining important
- Identify specific areas where rate freight improvements can be made and determine the
amount of money the company can potentially save. That is, we are looking for
specific recommendations that we can act on.
Special Requirements - A non-disclosure agreement must be signed by each student
for Student Team - Approximately two trips to Newport Beach, CA, for information collection or
- Students from the following embargoed countries are not eligible to participate on this
project: Sudan, Cuba, Iran, North Korea, Syria & Libya.
Company/Division Motorola, Inc., Integrated Supply Chain
Project Title Best in Class Direct To Retail Strategies
Project Problem or With the launch of the RAZR cell phone, Motorola was put on the consumer map as a
Opportunity hot, innovative consumer products company. Leveraging this image, Motorola desires to
(Describe the “value get a closer, more accurate sense of end-customer demand and trends by developing and
proposition” for this using new channels to market. Primary among these “disruptive channels” is direct-to-
project. That is, explain retail, which will initially focus on distributing directly to retailers warehouses, but will
why it is worth doing.) eventually encompass direct-to-store delivery and even direct-to-end consumer delivery.
Since Motorola is a relative new comer to direct-to-retail, we would like to understand
best-in-class examples of how companies developed and deployed completely new direct-
to-retail distribution channels, and strategies, tactics, and organizational alignments used
to get best results out of the new distribution channels.
Project Objectives Increase market share, maximize revenue, and better forecast future demand and trends
(for example, financial by deploying a successful direct-to-retail distribution channel. For this project, the
improvements, quality primary focus should be bricks and mortar distribution. If time permits, we would love
improvements, supply your thoughts on e-commerce based distribution to individual or enterprise end-
chain innovations, consumers.
Primary Project We recognize that this is a broad topic area, and that the project scope may need to be
Activities/Tasks sharpened to focus on specific project lines or customer classes. We anticipate that such
focusing will be done during Activities 1 and 2:
1. Gain an understanding of Motorola’s current distribution channels to retail
customers. This will be based on a review of written materials provided by Motorola
and selected interviewing of Motorola, and possibly partner, personnel.
2. Paint the landscape for direct to retail – what categories of companies use this model,
which companies have businesses models complementary to Motorola, what are
Motorola’s competitors doing in this space. This analysis will be based on literature,
web, and other publicly available information, plus any additional more proprietary
information that Motorola provides.
3. Using your results from Activity 2, define best in class within this space (i.e. is it
based on revenue, foot traffic, brand name proliferation…) and identify best in class
4. For these companies, research and present their successes and lessons learned.
5. Based on Activities 1 through 4, determine recommendations to Motorola as to how
best to succeed with the direct to retail business model with a high-level description
of the activities that will be necessary to implement your recommendations.
Anticipated • A set of business case analyses of the direct to retail experiences of other companies.
Deliverables • A presentation, with supporting documentation, that includes an overview of the
direct to retail landscape, an analysis of what it takes to succeed, and
recommendations for Motorola.
Special Requirements • Signed non-disclosure agreement (NDA)
for Student Team • 1-2 trips to Chicago (one to develop background understanding and meet the
Motorola team; and one to present the findings)
• Regular (probably once every two week) phone conferences with the Motorola
Project Champion for status updates
Company/Division Pulte Homes Inc., and Pulte Building Systems, LLC, Purchasing Department
Project Title Utilize Manufacturing Resource Planning System (MRP II) Information to Improve
Vendor Management at Pulte Building Systems
Project Problem or Pulte Homes, Inc., (NYSE: PHM), based in Bloomfield Hills, Mich., is a FORTUNE 200
Opportunity company with operations in 53 markets and 27 states. In 2005, the company delivered
(Describe the “value 45,630 homes in the U.S. and generated consolidated revenues of $14.7 billion. During its
proposition” for this 56-year history, the company has constructed more than 450,000 homes. Pulte Building
project. That is, explain Systems (PBS) is one of the nation's largest wood framing and concrete foundation
why it is worth doing.) companies with extensive operations in Arizona and Nevada. This wholly owned
subsidiary provides material and labor for concrete foundations, concrete flatwork,
framing and trim for all Pulte houses built in Arizona and Nevada
We are currently implementing an Oracle MRP II system within PBS, and there is an
opportunity to develop a data-based supplier management system based on this system,
and analyze information generated by the system to drive supplier performance and cost
Project Objectives Efficiently utilize new data and capabilities from the MRP II system in PBS to improve
(for example, financial vendor management, resulting in a significant cost savings estimated to be approximately
improvements, quality $1 million, as well as optimized vendor performance.
Primary Project There are a variety of ways that our MRP II system could potentially be used to improve
Activities/Tasks vendor management. One of the first activities on this project will be to determine
potentially high payoff approaches, which will then be analyzed in more detail to provide
us with specific actionable recommendations for how we can implement your
recommendations. The following set of activities are based on our initial assessment of
high payoff approaches, but this is subject to modification as you analyze this
opportunities in more detail.
1. Review our MRP II system and our current vendor management processes and
contracting approaches based on information provided by PBS.
2. Assess potential options for using the MRP II system to improve vendor management
based on your results from Activity 1, as well as review of literature, web resources,
and possibly interviewing experts. We anticipate that potential improvements will be
possible in a variety of areas because of our improved ability to forecast needs, track
performance, and conduct electronic data interchange. Thus, potential sub-activities
under this activity include such things as:
a. Develop a negotiating strategy to improve vendor terms given that we can
provide them a superior forecast
b. Create an implementation plan to drive major vendors to build EDI interfaces
c. Design and implement fair, objective supplier performance metrics.
3. There are also potential improvements in manufacturing and transportation that could
be implemented using the MRP II system. As time permits, or if your initial analysis
indicates the potential for high payoff from these improvements, then you can
investigate such operational issues as:
a. Analyze shipping of wall panels to mitigate the increase in shipping costs due to
going from shipping lumber packages to fully-formed walls
b. Generate linear programming model to optimize vehicle loading/routing based
on forecast shipping schedule.
4. Based on Activities 1, 2, and 3, develop specific recommendations, including a high-
level implementation plan, for ways to utilize our MRP II system to improve vendor
management, manufacturing, and transportation, resulting in increased revenues,
reduced costs, and improved vendor performance.
Anticipated Specific recommendations for ways to utilize our MRP II systems to increase revenues,
Deliverables reduce costs and improve vendor performance. If potential improvements in
manufacturing and transportation are identified and analyzed, then recommendations
regarding these will also be delivered.
Special Requirements Non-disclosure agreement, drug testing. International students may be required to
for Student Team document that they have a valid student visa.
Company/Division Raytheon Space & Airborne Systems, El Segundo
Project Title SAS Logistics Outsourcing Strategy
Project Problem or Space & Airborne Systems (SAS), the largest business unit within Raytheon with nearly
Opportunity $2 billion in revenue for 2005, is currently in the midst of several reorganizations and
(Describe the “value transformations. Supply Chain Logistics, specifically, has experienced several big
proposition” for this changes, including the consolidation of multiple warehouses into a single, consolidated
project. That is, explain distribution center and the outsourcing of the receiving dock to a third party logistics
why it is worth doing.) provider.
Logistics comprises warehousing, trucking, expediting, receiving, packaging, and
shipping at manufacturing sites in California, Texas, and Mississippi. Because these
various processes are highly integrated with each other as well as with our other supply
chain, manufacturing, and engineering processes, it is crucial that any changes to the
organization be understood thoroughly and that any negative impacts to Raytheon’s
business be minimized or eliminated. Too often decisions to outsource processes are
made without adequately determining the total impact to the greater organization. As the
Logistics organization moves forward, it is imperative that the company have a robust and
well-articulated process for determining which processes should be outsourced and which
should be developed in-house.
Project Objectives The primary project objective is to provide a process/tool for evaluating the costs, risks,
(for example, financial and opportunities associated with outsourcing various Logistics processes.
improvements, supply A successful project will:
chain innovations, • Allow Raytheon to make outsourcing decisions that reduce costs while also
improvements in maintaining customer service
• Compare Raytheon to benchmarks for the Aerospace and Defense industry and
best in class companies
Reference recent academic literature as well as industry references
Primary Project 1. Understand SAS Supply Chain Logistics at a high level, potentially requiring site
Activities/Tasks visits to Texas and California
2. Perform literature reviews regarding outsourcing of similar processes
3. Interview managers at multiple sites
4. Perform benchmarking for Aerospace and Defense Industry and best in class
companies. Raytheon will provide access to benchmarking information for the
Aerospace and Defense Industry, and the team will supplement this with information
available from literature, web resources, and experts.
5. Develop a cost model to quantify TOTAL impact to Raytheon based on different
6. Produce a process/tool for evaluating the costs, risks, and opportunities associated
with outsourcing various Logistics processes. We anticipate that the team will
prototype the tool in Excel and provide a process handbook for how to use the tool.
Anticipated - An overview of industry best practices and summary of literature review in related
- A process/tool for evaluating the costs, risks, and opportunities associated with
outsourcing various Logistics processes.
Special Requirements US citizens, Non-disclosure agreement, 2 trips to CA, possible 1 trip to TX & MS.
for Student Team
Company/Division Temple-Inland/Corporate Supply Chain
Project Title A Should-Cost Model for Direct Materials
Project Problem or Company Information:
(Describe the “value Temple-Inland Inc. (NYSE:TIN) is headquartered in Austin, TX. We are working
proposition” for this together as one company to create superior and sustainable value for shareholders,
project. That is, explain customers and employees. We have made significant progress implementing major
why it is worth doing.) initiatives to lower costs, improve operational efficiency, increase asset utilization and
drive return on investment. We are performance-driven, and our goal is to have the
highest ROI in our industry.
We have four core operations at Temple-Inland - corrugated packaging, forest products,
real estate and financial services.
Our Corrugated Packaging operation has six containerboard mills and can effectively
serve our customers through our integrated - nationwide system of converting facilities.
Corrugated Packaging is the largest segment of the paper market.
The Forest Products operation manufactures a diverse line of products for new home
construction and for repair and remodeling markets. This group manages the company's 2
million acres of forestland. Temple-Inland is the largest private landowner in Texas and
the fifth largest corporate forestland owner in the U.S. South. The Company's 2.0 million
acres of forestland are certified as managed in compliance with ISO 14001 and in
accordance with the Sustainable Forestry Initiative Standard of the Sustainable Forestry
Board to ensure forest management is conducted in a scientifically sound and
environmentally sensitive manner.
Temple-Inland's real estate segment, which operates under the name Forestar Real Estate
Group, is focused on real estate investment and development activities which include
single-family residential, commercial, mixed-use and multi-family housing projects.
The Financial Services operation includes two major operations: Guaranty Bank, with a
network of over 149 banking centers in Texas and California; and Guaranty Insurance
Services, Inc., ranked nationally in the top one percent of independent insurance agencies.
Our business philosophy is focused - we are a company on a journey to be the best by
consistently exceeding customer expectations, maximizing assets, lowering operating
costs and improving efficiency.
Temple-Inland total annual spend is $3.5B, of this, approximately $300MM is spent on
very strategic, critical direct materials. However, very little is in place for should-cost
models. We have limited information about the underlying cost drivers of each of these
major direct material categories. This puts us at a great disadvantage when it comes to
negotiations, price increase requests from the suppliers, and forecasting. We are more
reactive to the markets versus being pro-active.
Project Objectives Effective should-cost models and increased understanding of the cost drivers for these
(for example, financial direct materials should drive an additional savings of 1-3% or ~ $3MM-9MM.
Primary Project 1. Analyze our current spend data for key direct materials (see list below) using our
Activities/Tasks data warehouse (spend cube). The team will work with the e-sourcing manager and
the commodity manager to obtain the necessary reports and receive training and
access to the spend cube so that you can extract the data yourself.
2. Research and identify the cost drivers and related indices for the following direct
materials: Urea Formaldehyde Resins, Caustic Soda, Ink, Pearl Starch, Wax,
Adhesives, and Specialty Chemicals. Research will consist of consulting internal
resources, such as data and subject matter experts, as well as material that we make
available to the team via subscriptions and services
3. Based on the results of Tasks 1 and 2, build should-cost models for these specific
direct materials. These models will be implemented in an Excel spreadsheet
4. Using the model developed in Task 3, determine the correlation between our spend
data and the cost drivers/indices. The primary intent of this task is to identify which
direct materials have the highest impact related to cost drivers and volumes and
which direct materials have highest potential for possible spend reduction based on
the cost drivers/indices.
5. Identify and recommend tools or services that should be used for on-going support of
this activity. We will subscribe to trial subscriptions, where relevant, to allow the
team to evaluate these service.
6. Interaction of team with key Temple-Inland personnel will include VP of Strategic
Sourcing, Director of Sourcing (Direct, Capital, & MRO), e-Sourcing Manager, and
Commodity Manager of Direct Material.
Anticipated • Cost driver and related indices identification
Deliverables • Should-cost models for the strategic direct materials
• Recommendation of how to obtain costing information on an on-going basis – what
tools or services should we subscribe to or purchase?
• Optional if time permits: The executive management reporting that is required for
monthly tracking. This would be in the form of charts and graphs using Excel and
• Optional if time permits: The layout of the information, models, or recommended
links for this tracking system that can be published on our Strategic Sourcing web
Special Requirements Non-disclosure agreement. Approximately two trips to Austin, TX, for information
for Student Team collection and management presentations.
Company/Division VF Corporation (All U.S. Coalitions: VF Imagewear, VF Intimates, VF
Jeanswear, VF Outdoor, VF Sportswear) See “NOTE” below for further
information, about VF Corporation brands.
Project Title Free Trade Zone (FTZ) Benefit and Cost Analysis
Project Problem or VF Corporation (NYSE:VFC) is one of the world’s largest apparel companies.
Opportunity For over 100 years, we’ve grown by offering consumers high quality, high
value branded apparel. Our leading brands in jeanswear, intimate apparel,
outdoor and specialty apparel span virtually every channel of distribution. Our
brands are segmented into five coalitions: Jeanswear, Intimates, Imagewear,
Outdoor, and Sportswear.
With the 2006 opening of VF Outdoor’s Visalia, CA distribution center (DC)
(where a capability will be established as a free trade zone facility), coupled
with the very aggressive growth strategy of VF Corporation and the resulting
increasing imports from Asia, there is an opportunity to utilize the free trade
zone (FTZ) in Visalia for benefits of entry processing for the VF Outdoor
coalition and potentially other VF coalitions.
Project Objectives Our objective for this project is to analyze potential benefits and costs of
utilizing the new Visalia, CA Distribution Center FTZ for entry processing for
the VF Outdoor coalition, and potentially for other VF coalitions.
Primary Project Analyze potential benefits and costs of utilizing the new Visalia, CA DC FTZ
Activities/Tasks for entry processing:
1. Determine and document U.S. Customs documentation, financial
reporting, and process flow requirements for FTZ processing. This will
be done by reviewing Customs documentation and interviewing VFC
personnel or other experts.
2. Perform a cost-benefit analysis of utilizing the Visalia FTZ for entry
processing for the VF Outdoor coalition. This will require developing
cost and benefit metrics, understanding our current entry processing,
developing possible modifications to this processing based on using the
Visalia FTZ, and assessing the costs and benefits of this relative to the
current processes and other potential alternatives at Long Beach.
3. Examine the opportunity for FTZ/Bonded Entry processing benefits to
other VF Coalitions via Visalia or in close proximity to the LA ports of
Anticipated Deliverables 1. Documentation of all requirements for FTZ entry processing.
2. Benefits and costs of utilizing the Visalia, CA FTZ for entry processing
for VF Outdoor and potentially other Coalitions, including a comparison
with the current processes or other potential alternatives in close
proximity to the LA ports.
Special Requirements for One site visit to Long Beach, CA, and possibly to our Visalia, CA DC.
Student Team Potential on-site meeting with VF Corporate Transportation/Logistics
Management at CA location, or they may visit Phoenix.
NOTE: VF Corporation brands include the following: Jeanswear (Wrangler, Lee, Riders, Rustler, Brittania,
Timber Creek, Chic, Gitano, 20X, Hero, Maverick, H.I.S., Old Axe); Global Intimates (Vanity Fair, Vassarette,
Bestform, Lily of France, Tommy Hilfiger, Curvation, Gemma, Lou, Bolero, Intima Cherry, Variance, Belcor);
Imagewear (Red Kap, Bulwark, Penn State Textile, Horace Small, Lee Sport, CSA, Chase Authentics, NFL Red,
NFL White, VF Solutions, E.Magrath); Outdoor (The North Face, JanSport, Eastpak, Napapijri, Kipling, Vans,
Reef); Sportswear (Nautica, John Varvatos)