Merloni Elettrodomestici Spa Essay

Merloni Elettrodomestici Spa Essay-67
* During the period from 1984 to 1986, Merloni undertook a number of initiatives to improve efficiency in inventory control and logistics.

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The production planning time horizon was reduced from four months to three while the required lead-time to firm orders was reduced from two months to one.

In line with a new wave of efforts to further reduce inventory and enhance production efficiency, management is evaluating a proposal to replace regional warehouses with “transit-points”.

Question 1: What are the costs and benefits of Merloni's current distribution * Another important question is where Merloni would keep the spare parts required for its service personnel.

If these too are kept at the central warehouse it could lead to delay thereby having a negative impact on the quality of service.

* If the weather is bad near the central warehouse but good in other areas where there is demand, then it can lead to delays.

Moreover with the help of quantitative analysis described above, it is not advisable to extend this Transit Point methodology to all the warehouse locations.

In cross-docking, goods are received on one dock and are immediately shipped through another, without the need for storage.

To carefully assess the benefits and disadvantages of this proposal, a number of critical factors must be addressed: Inventory: As describe above, the current inventory levels held at the regional offices already reflect a 75% reduction in comparison to historical figures.

During the past few years, Merloni has implemented programs that have successfully shortened production-planning lead times and decreased inventory levels.

In particular, with the help of a centralized inventory planning system and implementation of an A-B-C inventory classification program, they were able to reduce inventory levels at the regional offices by 75%.

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