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Merloni Essay

588 words - 3 pages

The new transit point experiment will need high co-ordination among the retailers, transit point, central warehouse and the plant as the information flow is very important for the regular working of the system. The major change due to the transit point implementation is that the inventory at the regional warehouse which acted as cushion will not be further available and thus the inventory planning needs to be changed to absorb the demand fluctuation. The impact of the transit point experimentation on the different tiers of the Merloni supply chain are mentioned below:1. Manufacturing plant: The important change needed in the manufacturing plant is to make it more flexible so that the daily demand by the retailers can be incorporated in to the production planning. Now ...view middle of the document...

In case of total lead time, the time taken by the product from the plant to the retailers will be reduced as the product need not to spend time in the regional distribution centre as used to be earlier. But, the order lead time may increase owing to no inventory at regional distribution centre. So, the central warehouse should always have availability of different product types to ensure faster order execution3. Regional Distribution Centres: Regional Distribution centres will act as the transit point for the retailers. The impact on the regional distribution centre will depend on its location.a. The regional distribution centre located in the larger region can be easily converted in to the transit point as the demand is high (10 truckloads during peak demand). The information system is very important due to the high co-ordination required. Moreover, the operating cost will be reduced due to suspension of warehouse leaseb. In case of regional distribution centre located near to the smaller regions, the viability of transit point is less owing to the less demand and frequent servicing required by the retailers.4. Retailers: Since the retailer does not have the previous facility to get the product from the regional warehouse, so it needs to co-ordinate properly with the transit point and may increase the inventory level as the order lead time has increased.5. Customers: If the regional distribution centre of smaller region will be converted in to the transit point then the service level will decrease owing to the fewer demands. In the larger region, the decrease in service level may be less owing to high demand and inventory maintained by the retailers.

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