1. Given the TODAY capacity utilization, and thinking on a linear scale up to 100%, how many more units could William Company handle as part of their supply chain operation?
2. How many units returned would Williams have based on TODAY production numbers?

Williams Company Case

Company Information

Williams Company has made major changes to its supply chain over the last 3-years, all in an effort to improve its supply chain throughput. Improved throughput means cost savings, improved overall operations from materials acquisitions to inventory control, reduced returns and higher customer satisfaction levels.

Some (not all) of Williams Company Metrics Related to Their Supply Chain Metrics Over the Last Three Years

• Planning:
  • Average Inventory carrying cost:
    • 3-years ago = $0.58 per product item
    • Today = $0.41 per product item
  • Average percentage of obsolete inventory on hand:
    • 3-years ago = 4.8% of total product sales
    • Today = 2.2% of total product sales
  • Annual production volume:
    • 3-years ago = 2.19M units
    • Today = 2.47M units
• Source:
  • Average material acquisition costs
    • 3-years ago = $2.98 per unit
    • Today = $2.46 per unit
  • Average payment period
    • 3-years ago = 31 days per supplier/partner
    • Today = 22 days per supplier/partner

• Make:
  • Average number of defects per thousand units
    • 3-years ago = 98
    • Today = 88
  • Average make cycle time
    • 3-years ago = 21 days
    • Today = 23 days
  • Average capacity utilization (with no new expansion or capital expenditures)
    • 3-years ago = 92%
    • Today = 83%
• Deliver:
  • Average fill rate
    • 3-years ago = 78%
    • Today = 93%
  • Average return rate per 1000 units sold
    • 3-years ago = 5.6%
    • Today = 4.1%

Additional information

• Williams Annual Sales
  • 3-years ago = $18.3M
  • Today = $23.9M