Lexmark International Inc.
Supply Chain Leadership
Lexmark International Inc. Configure to Order
June 5, 2014 Presentations by 2014 ML Award Winners
CONFIGURE TO ORDER (CTO): Product Differentiation Closer to the Customer Presented by: Lamar Mason
Headquarters: Lexington, Ky.
Founded: 1991 Sales Offices: 70 Countries MFG Centers: 3 Continents Distribution: 170 + Countries Employees: 12,200 approx. Revenue: ~$3.7 Billion USD
Lexmark’s Supply Chain Landscape Situation Worldwide Single-source supplier in China Transport time 8 weeks Forecast customer demand High number of SKUs Customer demand variation Supply Chain concerns Managing at finished good part numbers leads to large bias (or error)
Supply Chain concerns Airship product to meet
demand Excess inventory
Conversions Shelf-life scrap
Managing at the product family level shows a much more accurate forecast
CTO Characteristics & Process CTO Characteristics
CTO High Level Process
Product differentiation closer to the customer
Generics manufactured @ China Supplier
Generic Cartridges Bulk packaging
Generics sent to Mexico VMI hub
Labeling with Print on Demand Technology Enable Pull System
Pulled to CTO Line
Palletized and Shipped to Customer
CTO Benefits & Prospects Current Benefits
Potential Prospects
100% Conversion reduction
Reduce obsolescence cost
>50% Shipping cost reduction
Additional product families and components
7% Inventory Cost reduction 58% Inventory Space Reduction
90% SKU reduction @ China supplier 80% Forecast bias reduction Employee Development
CTO at European production facility
THANK YOU FOR YOUR TIME
Lexmark International Inc. Configure to Order
June 5, 2014 Presentations by 2014 ML Award Winners
CONFIGURE TO ORDER (CTO): Product Differentiation Closer to the Customer Presented by: Lamar Mason
Headquarters: Lexington, Ky.
Founded: 1991 Sales Offices: 70 Countries MFG Centers: 3 Continents Distribution: 170 + Countries Employees: 12,200 approx. Revenue: ~$3.7 Billion USD
Lexmark’s Supply Chain Landscape Situation Worldwide Single-source supplier in China Transport time 8 weeks Forecast customer demand High number of SKUs Customer demand variation Supply Chain concerns Managing at finished good part numbers leads to large bias (or error)
Supply Chain concerns Airship product to meet
demand Excess inventory
Conversions Shelf-life scrap
Managing at the product family level shows a much more accurate forecast
CTO Characteristics & Process CTO Characteristics
CTO High Level Process
Product differentiation closer to the customer
Generics manufactured @ China Supplier
Generic Cartridges Bulk packaging
Generics sent to Mexico VMI hub
Labeling with Print on Demand Technology Enable Pull System
Pulled to CTO Line
Palletized and Shipped to Customer
CTO Benefits & Prospects Current Benefits
Potential Prospects
100% Conversion reduction
Reduce obsolescence cost
>50% Shipping cost reduction
Additional product families and components
7% Inventory Cost reduction 58% Inventory Space Reduction
90% SKU reduction @ China supplier 80% Forecast bias reduction Employee Development
CTO at European production facility
THANK YOU FOR YOUR TIME
