An applied research on the supply chain link between MGM Corporation and Makkau Industries Incorporated

• Main Authors: Gudani, Ryan Francis S., Manzano, Maria Katrina D., Masangkay, Emerson D.
• Format: text
• Language: English
• Published: Animo Repository 2001
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/12084
• Institution: De La Salle University

Executive Summary. This study is concerned with the Manufacturer-Supplier Supply Chain link between MGM Packing Corporation and Makkau Industries, Incorporated. The problem being addressed explicitly states that there is a 17.22% absolute deviation from the quantities ordered by MGM Corp. to that of quantities delivered by Makkau Industries, Inc., equivalent to an amount of 3,341,797 units of cologne bottles and caps in the year 2000. It is a serious and urgent problem because 7.69% of this amount account for the 100 mL bottles and caps, while the remaining 9.53% account for the 200 mL bottles and caps summing up to a total opportunity loss of Php 34,152,325.00. The system management and the proponents of this study believe that they have significant time and resources to solve this problem. The problem has the following specifications: What: Caps and bottles not delivered (12.20% ) or in excess (5.02%) by Makkau Industries, Inc. to MGM Corporation. Where: Makkau plastic bottles and caps production plant and MGM cologne production and packing plant. When: Mostly everyday except Sunday for the year 2000 How much (units) : Positive deviation (excess): 100 mL - Caps: 480,846 Bottles: 82,960, 200mL - Caps: 92,808 Bottles: 326,256 Negative deviation (not delivered) 100 mL - Caps: 917,136 Bottles: 370,500, 200 mL - Caps: 751,788 Bottles: 319,503. Its main causes are: 1. Changes in the Order Summary Sheet (OSS) are only given to Makkau during the weekly meeting held every Wednesday at MGM. 2. In terms of company forecasts, MGM Corp. provides as OSS, which is quarterly-based while Makkau's is but 2 weeks. Raw material suppliers are incapable of delivering units on-time for Makkau's production. The following are recommended to fully/partly solve the problem. 1. Extranet website 2. Process re-engineering 3. Equal delivery policies This solution is expected to result to the ff: 1. Initial Capital Investment = Php 9,000 and Php 3000 annually thereafter 2. NPV = Php 612,389,223.20 Net Benefit = Php 21,381,407/year 3. Principle of standardization, Strengthened supply chain links. This implementation of the recommended solution is proposed to start on September 3, 2001 for the trial run and on September 24, 2001 for the final implementation.