Assignment:
When you use Listerine antiseptic mouthwash, you are experiencing the last step in a complex supply chain spanning several continents and requiring months of coordination by countless businesses and individuals. The resources involved in getting a single bottle of Listerine to a consumer are unbelievable. As raw material transforms into finished product, what will be Listerine travels around the globe and through multiple supply chains and information systems.
THE JOURNEY BEGINS A farmer in Australia is harvesting a crop of eucalyptus for eucalyptol, the oil found in its leathery leaves. The farmer sells the crop to an Australian processing company, which spends about four weeks extracting the eucalyptol from the eucalyptus. Meanwhile, in New Jersey, Warner-Lambert (WL) partners with a distributor to buy the oil from the Australian company and transport it to WL's Listerine manufacturing and distribution facility in Lititz, Pennsylvania. The load will arrive at Lititz about three months after the harvest. At the same time, in Saudi Arabia, a government-owned operation is drilling deep under the desert for the natural gas that will yield the synthetic alcohol that gives Listerine its 43-proof punch. Union Carbide Corp. ships the gas via tanker to a refinery in Texas, which purifies it and converts it into ethanol. The ethanol is loaded onto another tanker, and then transported from Texas through the Gulf of Mexico to New Jersey, where it is transferred to storage tanks and transported via truck or rail to WL's plant. A single shipment of ethanol takes about six to eight weeks to get from Saudi Arabia to Lititz. SPI Polyols Inc., a manufacturer of ingredients for the confectionery, pharmaceutical, and oral-care industries, buys corn syrup from farmers in the Midwest. SPI converts the corn syrup into sorbitol solution, which sweetens and adds bulk to the Cool Mint Listerine. The syrup is shipped to SPI's New Castle, Delaware, facility for processing and then delivered on a tank wagon to Lititz. The whole process, from the time the corn is harvested to when it is converted into sorbitol, takes about a month. By now the ethanol, eucalyptol, and sorbitol have all arrived at WL's plant in Lititz, where employees test them, along with the menthol, citric acid, and other ingredients that make up Listerine, for quality assurance before authorizing storage in tanks. To mix the ingredients, flow meters turn on valves at each tank and measure out the right proportions, according to the Cool Mint formula developed by WL R&D in 1990. (The original amber mouthwash was developed in 1879.) Next, the Listerine flows through a pipe to fillers along the packaging line. The fillers dispense the product into bottles delivered continuously from a nearby plastics company for justin-time manufacturing. The bottles are capped, labeled, and fitted with tamper-resistant safety bands, then placed in shipping boxes that each hold one dozen 500-milliliter bottles. During this process, machines automatically check for skewed labels, missing safety bands, and other problems. The entire production cycle, from the delivery via pipe of the Listerine liquid to the point where bottles are boxed and ready to go, takes a matter of minutes. The line can produce about 300 bottles per minute-a far cry from the 80 to 100 bottles that the line produced per minute before 1994. Each box travels on a conveyor belt to the palletizer, which organizes and shrink-wraps the boxes into 100-case pallets. Stickers with identifying bar codes are affixed to the pallets. Drivers forklift the pallets to the distribution center, located in the same Lititz facility, from which the boxes are shipped around the world. Finally, the journey is completed when a customer purchases a bottle of Listerine at a local drugstore or grocery store. In a few days, the store will place an order for a replacement bottle of Listerine. And so begins the cycle again
Q1. Summarize SCM and describe Warner-Lambert's supply chain strategy. Diagram the SCM components.
Q2. Detail Warner-Lambert's facilities strategy.
Q3. Detail Warner-Lambert's inventory strategy.
Q4. What would happen to Warner-Lambert's business if a natural disaster in Saudi Arabia depletes its natural gas resources?
Q5. Assess the impact to Warner-Lambert's business if the majority of the eucalyptus crop was destroyed in a natural disaster. 6. Detail Warner-Lambert's information strategy