IAC Reynosa Case Study Final 
BAB- e-business supply chain management
International Automobile Components Case Study
ESC4701- Lean Principles
Group 3
Shuo Li, Shangfeng Sun, Virender Chopra, Bingling He, Weihong Jin, Wenjia Zan
Contents
Executive Summary 2
Problem Definition 2
Key Assumptions 2
Quantitative Analysis 3
Qualitative Analysis 3
Recommendations 5
Appendix A- Employee Ratios Calculation 7
Appendix B- Communication Channel Calculation 7
Appendix C- Warehousing Strategy Change 8
Appendix D- Ground Transportation Strategy 9
Appendix E - Ocean Freight Transportation 10
Appendix F – Process Flows 11
Executive Summary
This report has been written to provide you possible solutions for the International Automotive Components (IAC) Company regarding their Reynosa plant supply chain issues. Paul Salinas sought to rebuild the entire supply chain, from which we conducted quantitative and qualitative analysis to determine the root cause and provide possible solutions to address it. A recommendation follows based on cross-examining Salinas changes implemented and determining what is still missing in the IAC Reynosa plant.
In our evaluation, IAC had improved its operations by increasing its transparency, enhancing the flow of information by updating their SAP system, and as a result, improved their warehouse management strategy. With this updated warehouse management, it allowed IAC to eliminate their Canadian and Texas warehouse, and use only the Reynosa plant with their new packing strategy. This enabled them to become more standardized and lean in their practices. This was further complemented by their milk-run strategy for their trucks. Followed by a port switch from the Veracruz port to the Altamira port, resulting in optimization of their supplier route and significant cost savings.
With those changes in place, the problem that has yet to be resolved by Salinas remains unaddressed. The recommendation is that Salinas can implement host management meetings to establish a
International Automobile Components Case Study
ESC4701- Lean Principles
Group 3
Shuo Li, Shangfeng Sun, Virender Chopra, Bingling He, Weihong Jin, Wenjia Zan
Contents
Executive Summary 2
Problem Definition 2
Key Assumptions 2
Quantitative Analysis 3
Qualitative Analysis 3
Recommendations 5
Appendix A- Employee Ratios Calculation 7
Appendix B- Communication Channel Calculation 7
Appendix C- Warehousing Strategy Change 8
Appendix D- Ground Transportation Strategy 9
Appendix E - Ocean Freight Transportation 10
Appendix F – Process Flows 11
Executive Summary
This report has been written to provide you possible solutions for the International Automotive Components (IAC) Company regarding their Reynosa plant supply chain issues. Paul Salinas sought to rebuild the entire supply chain, from which we conducted quantitative and qualitative analysis to determine the root cause and provide possible solutions to address it. A recommendation follows based on cross-examining Salinas changes implemented and determining what is still missing in the IAC Reynosa plant.
In our evaluation, IAC had improved its operations by increasing its transparency, enhancing the flow of information by updating their SAP system, and as a result, improved their warehouse management strategy. With this updated warehouse management, it allowed IAC to eliminate their Canadian and Texas warehouse, and use only the Reynosa plant with their new packing strategy. This enabled them to become more standardized and lean in their practices. This was further complemented by their milk-run strategy for their trucks. Followed by a port switch from the Veracruz port to the Altamira port, resulting in optimization of their supplier route and significant cost savings.
With those changes in place, the problem that has yet to be resolved by Salinas remains unaddressed. The recommendation is that Salinas can implement host management meetings to establish a