What recommendations could I make for Michelin Tires in Europe having the following information? Are these good points for an executive summary?
Sales and Logistics Integration Strategy
Current Challenges
1. Forecast accuracy between forecast and actual is currently 20% -40% depending on product and country.
2. No supply manager function at the European level exists.
3. Allocating surplus inventory and covering shortages in certain countries.
4. Processes vary immensely from country and country.
5. The loss of 5,000 delivery points in the past three years. This has allowed wholesalers and independent dealers to gain market share.
6. Reducing deliveries to keep down transportation costs has led to supply uncertainty.
7. A new set of Logistical Functions needs to be implemented to make our products readily available to our customers.
Current Logistical Framework The two main components of the logistical process are the DOE/PR and DOE/GD.
The DOE/PR is the planning manager and is responsible for planning the following three main production stages.
1. Manufacturing
2. Vulcanizing
3. Marketing
The DOE/PR has six primary functions: 1. Forecasting 2. Allocation Demand Function 3. Planning Function 4. Allocation Function 5. Inventory Management Function 6. Distribution Function
The DOE/GD is the distribution manager and is responsible for logistics and distribution. These include getting orders ready, shipping, and delivery to customers’ point of sale.
There are five main entities that make up the DOE/GD. 1. Factory Warehouses 2. Distribution Centers 3. Advance Inventory 4. Proximity Zone 5. Shipment Zone Current Needs for Logistical Function
When planning our new Logistics Function, the following needs are our top priorities. 1. Service Quality 2. Costs 3. Organization 4. Sales Forecasts 5. Order Management 6. Inventory Management 7. Deliveries
Logistics Strategy Choices 1. Logistics completely integrated upstream 2. Logistics integrated according to product line 3. Logistics organizations left up to the supplier.