Kuiper Leda Supply Chain Introduction

Kuiper Leda Supply Chain Introduction

Kuiper Leda is an electronics components manufacturer. The company has received an offer to manufacture 250,000 Electronic Control Units (ECU) and 35,000 Radio Frequency Identification Device tags (RFID) from Midlands Motors. This is an annual contract; however, Kuiper Leda has issues with inventory control. The company will need to continue to manufacture the ECU's and RFID's for the original customers and implement procedures for the new contract. Since the existence of Kuiper Leda, the company has not had a structured inventory control system. However, with the acquisition of the new contract, Kuiper Leda will need to improve the supply chain if the company wants to remain competitive and gain new business. (See table 1) Kuiper Leda will be able to improve the supply chain by outsourcing and implementing an efficient inventory control method.

Kuiper Leda Supply Chain Defense

Outsourcing is a method used by most companies and it is not just for cheaper labor purposes or to downsize the workforce. Kuiper Leda is using outsourcing as a method to maintain the current level of production and to be able to acquire more business like the large volume the company has received from Midlands Motors. Outsourcing is a way for Kuiper Leda to align the supply chain with the company's vision. This practice not only allows the company to flow better but it allows the company to remain a top competitor in its industry. The company is not just outsourcing Kuider Leda is global sourcing. Global sourcing allows Kuiper Leda to offer quality prices at a lower cost. Global outsourcing will allow Kuiper Leda to decarease cycle time and inventory levels. Currently the company has an issue with the level of inventory levels and being able to produce quality work at mass amounts. This can be done with global outsourcing. Kuiper Leda has decided to outsource the ECUs. It is cost effective and it will not jeopardize the new business venture with the RFIDs and inventory levels will not be high with the ECUs and RFIDs.

Kuiper Leda had problems with inventory levels; however, the company hired a consulting agency to assist the company with this. LTD Consulting is an agency which specializes in reducing inventory levels. Inventory levels affected Kuiper Leda in each of the following operations: procurement management, shipment schedule, consolidating sales orders, and delivery. This caused problems in the manufacturing and quality of the products. LTD was able to find the root of the problem, which happened to be communication. Kuiper Leda did not have a formal process for informing all employees and managers of any change and this caused a problem with quality and being able to put out products in masses.

LTD faced several challenges beginning with implementing a system to allow changes in the way the company communicates to employees and management, and ways to control the inventory level. LTD was able build a system for inventory using the Just in Time approach. Kuiper Leda was also able to restructure the accounting processes to include accurate inventory levels and enhanced daily business operations. The supply chain and inventory levels were improved. The last tasks were to come up with measurements. It was not enough for Kuiper Leda to implement the changes, the company needed toensure the changes was accurate and the products were quality. Six Sigma is the method of choice by the company. Six Sigma involves four concepts- critical to quality, defect, process capability, and stable operations: Ensuring consistent, predictable processes to improve what the customer sees and feels (Aqiulano, Chase, & Jacobs, p 319). The purpose of Six Sigma is to ensure Kuiper Leda is meeting the requirements established by the company as a whole with the help of LTD. These are reviewed quarterly. Six Sigma has also allowed Kuiper Led to implement quality checks. These checks allow the company to detect products which does not meet customer satisfaction.

Kuiper Leda Measures

In order to establish measurements the company had to determine what to measure. It was decided to look at operating costs especially since the company implemented global outsourcing. Kuiper