This thesis examines the choices related to the Material Requirements Planning (MRP) system, focusing on solving inefficiencies caused by the uniform application of Lead Time (LT) parameters for both local suppliers and those from low-cost regions, specifically China and India. The current MRP system at Lowara S.r.l., a leading company in the hydraulic pump sector, fails to leverage the flexibility and responsiveness of local suppliers, despite their higher material costs. This uniform approach results in overplanning and poor demand management, leading to suboptimal inventory value. The core of this research involves a detailed simulation and economic analysis aimed at optimizing the MRP system; by adjusting the LT parameters based on supplier location, the simulation reveals significant improvements in inventory management. An alternative scenario for local supplier management was explored, through the implementation of a milk run system, which further enhances flexibility. The study also investigates the complexities associated with sourcing from low-cost regions, specifically examining challenges like container delays and shipping disruptions commonly encountered with suppliers from the Far East. These logistical hurdles highlight the critical need for adopting a strategic dual-sourcing strategy. The findings indicate that implementing an optimized Material Requirements Planning (MRP) system can effectively address these issues, thereby improving overall operational efficiency and maximizing the competitive advantages offered by both local and international suppliers.
This thesis examines the choices related to the Material Requirements Planning (MRP) system, focusing on solving inefficiencies caused by the uniform application of Lead Time (LT) parameters for both local suppliers and those from low-cost regions, specifically China and India. The current MRP system at Lowara S.r.l., a leading company in the hydraulic pump sector, fails to leverage the flexibility and responsiveness of local suppliers, despite their higher material costs. This uniform approach results in overplanning and poor demand management, leading to suboptimal inventory value. The core of this research involves a detailed simulation and economic analysis aimed at optimizing the MRP system; by adjusting the LT parameters based on supplier location, the simulation reveals significant improvements in inventory management. An alternative scenario for local supplier management was explored, through the implementation of a milk run system, which further enhances flexibility. The study also investigates the complexities associated with sourcing from low-cost regions, specifically examining challenges like container delays and shipping disruptions commonly encountered with suppliers from the Far East. These logistical hurdles highlight the critical need for adopting a strategic dual-sourcing strategy. The findings indicate that implementing an optimized Material Requirements Planning (MRP) system can effectively address these issues, thereby improving overall operational efficiency and maximizing the competitive advantages offered by both local and international suppliers.
Strategic optimization of dual-sourcing and barriers in low-cost regions: The Lowara S.r.l. case
DI RADO, PATRICK
2023/2024
Abstract
This thesis examines the choices related to the Material Requirements Planning (MRP) system, focusing on solving inefficiencies caused by the uniform application of Lead Time (LT) parameters for both local suppliers and those from low-cost regions, specifically China and India. The current MRP system at Lowara S.r.l., a leading company in the hydraulic pump sector, fails to leverage the flexibility and responsiveness of local suppliers, despite their higher material costs. This uniform approach results in overplanning and poor demand management, leading to suboptimal inventory value. The core of this research involves a detailed simulation and economic analysis aimed at optimizing the MRP system; by adjusting the LT parameters based on supplier location, the simulation reveals significant improvements in inventory management. An alternative scenario for local supplier management was explored, through the implementation of a milk run system, which further enhances flexibility. The study also investigates the complexities associated with sourcing from low-cost regions, specifically examining challenges like container delays and shipping disruptions commonly encountered with suppliers from the Far East. These logistical hurdles highlight the critical need for adopting a strategic dual-sourcing strategy. The findings indicate that implementing an optimized Material Requirements Planning (MRP) system can effectively address these issues, thereby improving overall operational efficiency and maximizing the competitive advantages offered by both local and international suppliers.File | Dimensione | Formato | |
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Strategic optimization of dual-sourcing and barriers in low-cost regions The Lowara S.r.l. case.pdf
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https://hdl.handle.net/20.500.12608/74716