Академический Документы
Профессиональный Документы
Культура Документы
Group 4
Founded in 1930 by Aristide Merloni Diversified its business from production of weighing instruments into production of gas cylinders, electric water heaters, and gas stoves Further diversified in making wide range of kitchen and bath appliances In 1970s formed Merloni Group and distributed into 3 separate domestic manufacturing divisions based on product line and an engineering company.
Merloni Electtrodomestici (Domestic Appliances) Products : Freestanding and built in stoves, Freezers, Refrigerators, dishwashers and washing machines Plants: Italy-5, Other European countries-3 Sales : 75% of the company consolidated sales in 1984.
Merloni Igienico Sanitari (Bath & Heating Products) Products: Water Heaters, Bathtubs and Sinks, Solar Panels, Solar energy based heating systems and Heat Pumps Sales: 20% of the company consolidated sales in 1984.
Merloni Casa (Built in Kitchen and Bath Furniture) Products : Design, manufacture and installed built in Kitchen and modular designed bath Furniture. Sales : 4% of the company consolidated sales from modular furniture in 1984. Products: Licensed Merloni technology and oversaw construction of plants to produce products based on Merloni Technology. Plants: 15 plants through JVs outside of Italy. Sales: 1% of the company consolidated sales in 1984.
Followed decentralization policy Small plant size with dedicated product line Production facility at outskirts of small country towns Harmonious relationship with surrounding society Access to reliable pool of semi skilled workers. Reputed for Innovation and Quality in Italy and abroad All plants connected to central computers at Merloni Head Offices. CAD aided designing Group sales : 626 billion lire, Export -60% 20% average annual increase in sales from 1980-84
Freestanding products were sold to retailer at urban and rural areas. Urban retailers keep stock due to high sales volume while rural retailers ordered products directly from Merloni. Lead time of products : 24 hour for goods in regional warehouse. 2-6 days for goods from central warehouse. Shipment delays due to either : a) Production problem at plant, b) New product introduction, c) Unexpected high demand, d) Transportation equipment failure or adverse weather Stock out at warehouses creates more impact on small retailer than the bigger ones.
5 small plants with dedicated product line. Distribution system consists of 3 echelons: plant warehouse, a central warehouse and regional warehouses. FG sent regularly to central warehouse from each plant which is further dispatched to 17 regional warehouses or directly to customers. Volume discount given to customers @4000 lire. Regional warehouses constitute 65% of freestanding product sales. Shipment from central warehouse to regional warehouse is only when orders accumulate for a full truckload. Distant locations warehouse store high inventory.
4 month long production planning horizon, warehouse manager used informal replenishment methods. Phase wise implementation of ABC model with 2 week, 4 week and no inventory of A, B, C items respectively. Inventory level calculation and other systems were tied to the central warehouse. Performance based incentive of warehouse managers. Inventory level dropped by 75% within 2 weeks. Production planning horizon reduced from 4 to 3 months. Set up times reduced, shorter and economic production run size, short production planning periods, distribution resource planning program are further improvement done.
Mr. Bose encountered more orders that can be accommodated in the three local delivery trucks or one trailer trucks He would call some of his customers and ask if they could wait an extra day for their products. Majority of the customers never realized that they were not being served from their regional warehouse. Total operating cost estimated to have fallen by 20% ( by means of suspending warehouse lease payments and discharge our warehouse employees). No additional strains on the systems ( No New products were introduced and Weather cooperated) Would require precision planning to avoid stock outs.
45 100 25
Jan Feb March April May June July August September October November December
The amount of operational cost saving can be offset by 1.Cost incurred for converting warehouses into docking stations 2. 3.Additional warehouse capacity and shipping docks at the Central warehouse 4. 5.Planning and coordination ( Either by Technology and Manual) 6. 7.Additional transportation costs 8. 9.Cost of lost sales due to customer dissatisfaction ( Due to huge spikes in demand for example New product Introduction ) .
Thank you