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Electrolux China “Network Strategy” ProjectFinal Report PresentationBeijing, March 10, 1999ContentsProject Introduction and BackgroundCustomer Survey- Survey Approach- Survey Results- Findings and OpportunitiesLogistics Network- EOQ inventory modeling- Logistics network modelingRecommendations and next stepsAppendices - Process flow - Cost analysisMajor Brands Market Share in 1999Electrolux China has identified supply chain improvements as one of its corporate priorities to improve customer satisfaction and cost performance.Electrolux ObjectivesElectrolux’s supply chain objectives...… are to improve current performance...… to deliver real bottom line benefitshigh inventory carrying costReduce working capitalIncrease turnover (through greater product availability)in-store stock-outstoo many warehouses: limited inventory and service control: SOP systems and procedures for inventory control are not systematically in place/applied limited know-how and supportunclear responsibilities and performance criteriaElectrolux China has committed to achieve Best Practice Service and Cost, as basis for rapid business growthReduce operating costsLikely gaps in service satisfaction. Required Service Levels and competitors’ position are not measuredSatisfy requirements of target customers (better than competition)Limited visibility and control, appropriate perforrmance criteria not in placeAchieve full control of the entire logistics processEXPECTED RESULTSPROJECT OBJECTIVE:Increased Revenue- Improved product availability and promising capabilities- Scalability to meet future business requirements.- Improved responsiveness to market conditions.- Optimized fill rate capability.- More flexible, responsive delivery options- More value-added services.Reduced logistics costs- Improved end to end supply chain visibility- Lower cost-to-serve in transportation and distributionImproved asset productivity- Fewer stock locations through rationalization to achieve higher networ
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