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The client’s sales offices are located
across the globe. They also have manufacturing
plants in the US, Europe, Japan and Singapore.
The sales offices sent purchase orders from OEM
and retail customers to the client headquarters
in the US. OEM customers contribute 65% of the
entire orders.
The client’s external environment was characterized
by fluctuating demand and volatile pricing. The
client has short-term contracts (15 days) with
OEMs and spot pricing for non-OEM clients.
Internally the client had to deal with high capital-intensive
operations since depreciation is about $1 million/day.
The client had a broad product mix (12000 + products)
with high manufacturing lead times and varying
production yields. Product life cycles were shortened
due to increased obsolescence. It was very essential
to have a system that dynamically incorporated
changes in the external and internal environments
in production planning to help optimize resource
utilization and improve shop floor efficiencies
while managing customer demand.
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