Case Study Question:
A fishing boat manufacturer, Pro Fishing Boats (PFB), is having many problems with critical
globally sourced parts. Recent problems have caused line shutdowns. In response PFB has
mandated six weeks inventory as buffer. Management has asked you to evaluate if that is a right
decision.
Currently, there is very little visibility of inventory in supply chain and communication with the
suppliers is minimal. In fact PFB has no supplier visibility past Tier 1 suppliers.
To map the supply chain you should follow one critical component. After interviewing supply
chain participants you have collected the following information.
The critical component selected for study is manufactured in China by Tier 1 supplier,
Manufacturing Inc. (MI). MIs production schedule is based on orders sent via fax from PFBs
warehouse. The supplier operates on 90-?60-?30 day forecast along with a weekly order. After
completing production MI sends component via truck to Shanghai Port to load to ship for USA.
Truck transport to the port takes 3 days and loading at port takes 1. MI holds 9-?week finished
goods buffer inventory. Manufacturing time for component is 3 days. The ship takes 14 days to
reach USA. Upon arrival custom in LA takes 5 days. The goods travel by train to Chicago in 7
days. After holding in Chicago for 3 days components are trucked to PFB warehouse where 6-?
week buffer is mandated. It takes 2 days to ship part from warehouse to the manufacturing plants
within US.
The component is made up of two main raw materials: one sourced from China and one from the
US. To avoid the risk of stock-?out on raw materials MI maintains 4-?week buffer in China and
12-? week buffer in the US. These Tier II supplier orders are by formal purchase order.
Questions:
1. Create a value stream map (VSM) of this supply chain. What other information is
needed?
2. Where is there risk for supply chain disruptions or stoppages to the flow of materials?
3. Where do opportunities reside in improving supply chain operations and how has value
stream mapping (VSM) help to reveal these?
