Class Presentation November 24 th 2009 Project AoA GaTech

Transcription

1 Class Presentation November 24 th 2009 Project AoA GaTech Ahmad El Tannir, Christopher A. Klug, Felix Friemann, Jason Philip, Manuel Klennert, Sven Christian Mueller

2 Audi of America Supply Chain Optimization Agenda I. Project Introduction II. III. IV. Results Discussion Summary V. Recommendations Source: 2 Project Distribution from port to dealers,

3 I. Project Introduction Audi of America Sells ~80k vehicles at ~260 dealerships in USA Manufacture vehicles in Germany Ship to East, Gulf, and West coasts Train and truck network from 4 ports Bigger Picture Part of Volkswagen logistics network e.g. use of VW vessels, share rail cars Looking to merge Audi & Porsche supply chains ~1% of cars sold in America ~2/3 rds sold in California, Florida, & New England Source: 3 Project Distribution from port to dealers,

4 Planned Sales by Dealership Project Distribution from port to dealers,

5 I. Project Introduction Project Goals Develop Greenfield approach from port to dealer Evaluate current logistics network Evaluate synergies between Porsche Logistics and Audi Develop concept on how to differentiate between sold vs. stock orders Evaluate logistics network with target growth Source: 5 Project Distribution from port to dealers,

6 II. Results Cost Summary per Audi 120% 100% -4% -6% +1 % 80% +5% 60% -14% -7% -8% -4 % Inventory Transport 40% Time 20% 0% Current Greenfield Differentiated Porsche Projected Growth 6 Project Distribution from port to dealers,

7 II. Results Current Model Greenfield Approach Differentiated Current SC Design Projected Growth Porsche 7 Project Distribution from port to dealers,

8 Audi USA Distribution Network 4 Ports 4 Railheads Kent Emden St. Paul Chicago Davisville Denver San Diego Rail Brunswick Houston Ports Current Railheads 8 Project Distribution from port to dealers,

9 II. Results Greenfield Model Greenfield Approach Minimal cost Differentiated Current SC Design Projected Growth Porsche 9 Project Distribution from port to dealers,

10 Greenfield Distribution Network 6 Ports 5 Railheads Emden Framingham San Francisco Denver Chicago Newark Baltimore Los Angeles Atlanta Ports Railheads Houston Miami 10 Project Distribution from port to dealers,

11 Key Differences Current Model Greenfield 4 Ports 6 Ports 4 Railheads Close Brunswick, Davisville, San Diego 120% 100% 80% 60% 40% 20% 0% +5 % -14% Inventory Transport Time Open Baltimore, LA, Miami, Seattle, Newark 5 Railheads Close Seattle, St. Paul Open Atlanta, San Francisco, Framingham 11 Project Distribution from port to dealers,

12 Sensitivity Analysis Ports 120% 100% 80% 60% 40% Newark Brunswick Newark Miami Newark Miami Newark Baltimore Miami Inventory Transport Time Houston Houston Houston 20% LA LA LA Seattle LA Seattle 0% 3 Ports 4 Ports 5 Ports 6 Ports 12 Project Distribution from port to dealers,

13 Sensitivity Analysis Inventory Costs 140% 120% ~80 % more 100% 80% +10% -9% Inventory 60% 40% <1% less Greenfield +6% Transport Time 20% 0% 0% 5% 10% 13 Project Distribution from port to dealers,

14 II. Results Differentiated Supply Chain Greenfield Approach Differentiated Current SC Design Projected Growth time focus for sold order and high value cars (trucking) Porsche 14 Project Distribution from port to dealers,

15 Days Results Differentiated Supply Chain Note: Differentiated has 5% higher costs than Greenfield Time 120% 100% 80% High Value 60% Orders Sold 40% Orders 20% Stock Orders 0% Cost -4 % -7 % Inven Trans 15 Project Distribution from port to dealers,

16 Key Differences Current 4 Railheads 4 Ports Differentiated SC 3 Railheads (Chattanooga, Chicago, Denver) Opens Chattanooga, Closes Seattle and St. Paul 6 Ports (Baltimore, Houston, Los Angeles, Miami, San Francisco, Newark) Keeps only Houston Source: 16 Project Distribution from port to dealers,

17 II. Results Add Porsche to the differentiated Audi Supply Chain Greenfield Approach Differentiated Current SC Design Projected Growth Include Porsche volumes, time focus for Porsche, sold + high value Audis Porsche 17 Project Distribution from port to dealers,

18 Days Key Differences Current Not a direct comparison Differentiated is more appropriate Add Porsche Opens Baltimore, Los Angeles, Miami, San Francisco, Newark Closes Davisville, San Diego Time High Value Orders Sold Orders Stock Orders -7% 100% 50% 0% Cost -4% -6% -7% -8% Inventory Transport 18 Project Distribution from port to dealers,

19 II. Results Projected Audi Growth Greenfield Approach Differentiated Current SC Design Projected Growth Increased volumes, more sold and high value (time focus as in diff.) Porsche 19 Project Distribution from port to dealers,

20 Days Key Differences Current X% sold order Y% high value orders Projected Audi Growth Increased volume Higher amount of sold and high value orders Time High Value Orders Sold Orders Stock Orders 100% 50% 0% Cost -4% +1% +1% -4% -7% -4% Inventory Transport 20 Project Distribution from port to dealers,

21 III. Discussion Assumptions Linear time and cost assumption Context: VW Network Inventory of 5 cars per rail lane usage Fixed opening cost for ports Times Port: 4 days (target of AoA) Railhead: 1 day Vessel: provided by AoA (VW vessels) Rail: Union Pacific + 2 days Trucking: distance / 500 miles Costs Avg. Audi Values: $ X / Y Avg. Porsche Value: $ Z Inventory holding costs: 5% Opening ports: $ P Transportation costs provided by AoA Source: 21 Project Distribution from port to dealers,

22 Considered Supply Chain Facilities for Greenfield Approach 22 Project Distribution from port to dealers,

23 Approach: Multiple Flow Model (AMPL) Choice of potential ports and railheads 4 types of cars modeled separately: Audi s: Stock order / Sold order / High Value Porsche Difference: different average values and the option to focus on speed (by pure trucking from east-/gulfcoast) Minimum # of cars per year to use a port or a rail lane Objective: Minimize cost (inventory + transport) Optional constraints (e.g. use certain # of ports, focus on speed for certain type of cars by trucking,..) 23 Project Distribution from port to dealers,

24 IV. Summary 120% 100% -4% -6% +1 % 80% +5% 60% -14% -7% -8% -4 % Inventory Transport 40% Time 20% 0% Current Greenfield Differentiated Porsche Projected Growth 24 Project Distribution from port to dealers,

25 V. Recommendations Implementation Fast delivery of non-stock orders: 6% cost saving with 4 days delivery savings Change railheads: Serve Chicago via East coast port Due to low sensitivity over 3-6 ports: Brunswick to Miami (stay at 4 ports) Minimal impact of Porsche on Audi network: Assess savings on Porsche network Change current model assumptions for Growth model Non-linear increase in transportation costs under current assumptions Take advantage of concave costs & time Consider influence of VW in more detail Scale of synergies, e.g. share fixed costs, share trains, concave costs and time Possible disadvantages, e.g. choice of ports maybe optimal for VW but not for Audi 25 Project Distribution from port to dealers,

26 Comments/Questions Source: 26 Project Distribution from port to dealers,

27 Thank you. 27 Project Distribution from port to dealers,