Caterpillar, Inc: Consolidating Packaging Material Vendors to Reduce Supply Chain Costs

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Title: Caterpillar, Inc: Consolidating Packaging Material Vendors to Reduce Supply Chain Costs
Author: Davignon, Katie ; DeBow, Danielle ; Eldridge, Christine ; Gay, Brad ; Kim, Young Gul ; Moon, Heeseung ; Suen, Courtney ; Wood, Daniel
Abstract: Caterpillar purchases products and parts from over 1,000 suppliers worldwide. Suppliers select packaging material vendors and pass related costs to Caterpillar. To consolidate this vendor base, the team designed and implemented a combinatorial auction that allows for single-product bids along with bids on bundles of products to receive quantity discounts. The team developed a tool for selecting winning vendors through an integer program with business constraints. The solution is estimated to provide an annual savings of $700K-$1M in the Midwest region, and is scalable to be implemented globally.
Description: Presented on December 14, 2011 from 5:45 PM – 8:00 PM in the Klaus Advanced Computing Building, room 1443 on the Georgia Tech campus. Best of Senior Design Fall 2011 Finalist Presentations. Runtime: 22:17 minutes
Type: Presentation
Date: 2011-12-14
Contributor: Georgia Institute of Technology. School of Industrial and Systems Engineering
Relation: ISYE Senior Design
Publisher: Georgia Institute of Technology
Subject: Caterpillar
Combinatorial auction
Industrial engineering
Senior design
Supply chain
Advisor: Pekgun, Pelin

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