Merloni Case
Case Analysis On Merloni Elettrodomestici Spa Economics Essay
Merloni Elettrodomestici SpA is an Italian company based in Fabriano and is one of Europe’s biggest makers of home appliances. In February 2005, Merloni Elettrodomestici was renamed Indesit Company, Indesit being the best known of the Group’s brands outside Italy. The Company was also operating under its “historic” brand, Ariston, and the regional brands Hotpoint, Scholtes and Stinol.
During the perio from 1984 to 1986, Merloni undertook a number of initiatives to improve efficiency in inventory control and logistics. One such initiative was the transit point experiment where in the Milano region, regional distribution centre was eliminated in favour of tranit points which held zero inventory.
The following is an analysis of the Transit Point Experiment conducted by Merloni:
Cost saving in terms of infrastructure cost of regional warehouses and their maintenance.
The company would require lesser amounts of overall inventory to be maintained.
As regional warehouses would be closed there would be lesser labor requirements.
Transit Point methodology works similar to JIT where-in the required amount of goods are shipped at the required time.
Since it works more on the Pull from the customer and due to elimination of regional warehouses, the effect of bullwhip should be lower.
Because the regional warehouses will be eliminated, the capacity storage of the central warehouses should be expanded to meet the requirements of the extra Cycle inventory. This would come as an additional cost to the company.
Intensive planning of daily shipment should be done. It is not only required to calculate the exact amount of goods to be shipped but also the arrangement of the goods (to eliminate time in loading/unloading activities).
Because of this intensive planning more skilled administration staff would be required.
If the customer does not order wihin 3pm, the delivery of the product would happen only after
Merloni Elettrodomestici SpA is an Italian company based in Fabriano and is one of Europe’s biggest makers of home appliances. In February 2005, Merloni Elettrodomestici was renamed Indesit Company, Indesit being the best known of the Group’s brands outside Italy. The Company was also operating under its “historic” brand, Ariston, and the regional brands Hotpoint, Scholtes and Stinol.
During the perio from 1984 to 1986, Merloni undertook a number of initiatives to improve efficiency in inventory control and logistics. One such initiative was the transit point experiment where in the Milano region, regional distribution centre was eliminated in favour of tranit points which held zero inventory.
The following is an analysis of the Transit Point Experiment conducted by Merloni:
Cost saving in terms of infrastructure cost of regional warehouses and their maintenance.
The company would require lesser amounts of overall inventory to be maintained.
As regional warehouses would be closed there would be lesser labor requirements.
Transit Point methodology works similar to JIT where-in the required amount of goods are shipped at the required time.
Since it works more on the Pull from the customer and due to elimination of regional warehouses, the effect of bullwhip should be lower.
Because the regional warehouses will be eliminated, the capacity storage of the central warehouses should be expanded to meet the requirements of the extra Cycle inventory. This would come as an additional cost to the company.
Intensive planning of daily shipment should be done. It is not only required to calculate the exact amount of goods to be shipped but also the arrangement of the goods (to eliminate time in loading/unloading activities).
Because of this intensive planning more skilled administration staff would be required.
If the customer does not order wihin 3pm, the delivery of the product would happen only after