Tire Supply Chain

CURRENT SUPPLY CHAIN ENVIRONMENT

Anders ReedStephen HoynackiJustin Juback

CUSTOMER TRANSACTION MODES

• Retail • Catalog• Internet• Person-to-person

MICHELIN MANUFACTURING PLANTS

• Ft. Wayne, In

• Covington, IN

• Louisville, KY

• Ardmore, OK

• Asheboro, NC

Norwood, NC Greenville, SC Columbia-Lexington, SC Dothan, GA Tuscaloosa, AL

WAREHOUSE LOCATIONS

• Detroit, MI

• Jacksonville, FL

• Charleston, SC

• San Jose, CA

• Seattle, WA

• Cincinatti, OH

TRANSPORTATION USED

• Trucking• Trains

PACKAGING USED• Bar codes

• Minimal packaging material used

• Easily packable and stackable for transportation

• The minimal packaging material makes the tires very easy to wearhouse

LEGAL CONSTRAINTS• Freight weight• Driving hours• Damaged goods responsibility

TRANSACTION SUPPLY CHAIN DESIGN

BUYER BEHAVIOR = SPECIALTY

• Customers want the tires to align with their specific needs and wants

• It’s not a good that can be found anywhere and with extreme ease

• Consumers have to research the product and shop competitors

• It is a high involvement purchase process

MARKET COVERAGE = INTENSIVE

• Sell the tires at as many locations as possible to create brand awareness

• Everyone needs tires so it’s a product that needs to be everywhere

CHANNEL STRUCTURE- INDIRECT• Michelin does not have stores to sell it’s tires

• Different ways utilized to sell products Retail Catalog/Mail Internet Other (person to person)

OWNERSHIP

• Michelin is corporately owned

• They are publicly traded

• The business is viewed as an entity of it’s own in the eyes of the law

SUPPLY CHAIN CONSTRAINTS• Little to no constraints

• Non-perishable product

• Can be manufactured and transported any time of the year

• Price per unit isn’t high enough to rule certain transportation methods out with concern for damage

• However, tires are very heavy so the units/load ratio would possibly decrease and costs would increase

LOGISTICS SYSTEM DESIGN

PLANT DC LOCATIONS

• Our global network supports the Mid-Michigan market

• Importing goods from other countries

• Michelin doesn’t manufacture in Mid-Michigan

• Headquarters are located in Greenville, SC

TRANSPORTATION USED

• Truck • Railway • Plane• Vessels

INVENTORY STRATEGY = SPECULATION • Savings created through leveraging economies of scale

• Delivered finished goods in bulk

• Reduced logistics costs through optimal uses of resources like trucks and warehouses

• Inventory costs would normally increase using this strategy, but our inventory doesn’t experience obsolescence

PACKAGING • Bar codes• No packaging

POST-SALE SUPPORT

• Returns are handled by 3PL’s

• Repair and return locations would be at dealerships and in stores where the tires are sold.

• If the return is because of faulty product specifications the store returns the tires to the supplier.

• Waste disposal

• End-of-life tires go back to manufacturing plants where the recovery process is handled