Car Assembly Supply Chain
Introduction
Reflection
The motor vehicle assembly is one of the largest industry in the world. Usually, the manufacturing process in this industry entails car manufacturers’ assembling various parts from specialized manufacturers. Accordingly, this industry has an intricate supply chain model that is used when procuring manufacturing materials and in the sale of finished products to customers. This industry consumes about a quarter of the world’s steel and forty percent of the entire oil output.
Strategies
There many costs involved in the supply chain process, which determine the success of an organization. As a result, most of the automotive companies adopt strategies, such as the just-in-time method, which make them more efficient. Further, companies must forecast on the demand levels so that they can manufacture the right quantity of vehicles needed in the market.
Monte Carlos Simulation
The Monte Carlos simulation is a technique used to predict the possible outcomes in a business. This program considers practical real-life scenarios so that it can give realistic outcomes. The Monte Carlos simulation in this paper evaluated the number of tires, engines, chassis, and the front and back windshield that can be delivered to the company weekly. It also examines the number of vehicles that can be assembled and delivered to distributors and retailers on each week.
Methodology/Approach
Suppliers
The paper simulates the number of tires, engines, front and back windshields, and chassis that each of the company’s four suppliers can supply weekly. The random numbers were generated from the Excel Workbook RAND function. The frequency is the probability of an event happening, and cumulative frequency is the sum of all frequencies.
Tires
| Event | Frequency | Probability of Occurrence |
| Bad material | 3 | 3% |
| Shortage of Labor | 2 | 2% |
| Different Sizes | 2 | 2% |
| Shortage of Labor | 2 | 2% |
| Mistake of Manufacturer | 1 | 1% |
| Good Delivery | 90 | 90% |
Engine
| Event | Frequency | Probability |
| Downtime in Factory | 2 | 2% |
| Defective Materials | 2 | 2% |
| Failure to Meet Specifications | 1 | 1% |
| Lack of Transport | 1 | 1% |
| Shortage of labor | 1 | 1% |
| Good Delivery | 93 | 93% |
Chart
Chassis/Frame
| Event | Frequency | Probability |
| Downtime in Factory | 2 | 2% |
| Defective Materials | 2 | 2% |
| Failure to Meet Specifications | 1 | 1% |
| Lack of Transport | 1 | 1% |
| Shortage of labor | 1 | 1% |
| Good Delivery | 93 | 93% |
Chart
Front and Back Windshield
| Event | Frequency | Probaility |
| Downtime in Factory | 3 | 3% |
| Defective Materials | 2 | 2% |
| Failure to Meet Specifications | 1 | 1% |
| Lack of Transport | 2 | 2% |
| Shortage of labor | 1 | 1% |
| Good Delivery | 91 | 91% |
Chart
Batteries
| Event | Frequency | Probability |
| Downtime in Factory | 1 | 1% |
| Defective Materials | 2 | 2% |
| Failure to Meet Specifications | 1 | 1% |
| Lack of Transport | 3 | 3% |
| Shortage of labor | 1 | 1% |
| Good Delivery | 92 | 92% |
Assembly
The simulation of the assembly section shows the number of vehicles that can be assembled weekly.
| Event | Frequency | Probability |
| Downtime in Factory | 1 | 1% |
| Defective Materials | 3 | 3% |
| Failure to Meet Specifications | 1 | 1% |
| Lack of Transport | 2 | 2% |
| Shortage of labor | 1 | 1% |
| Good Delivery | 92 | 92% |
Chart
Distribution
The simulation of distribution shows the number of vehicles that can be distributed to distributor 1, 2, and 3 each week.
Distributor 1
| Event | Frequency | Probability |
| Downtime in Factory | 1 | 1% |
| Defective Materials | 1 | 1% |
| Failure to Meet Specifications | 2 | 2% |
| Lack of Transport | 1 | 1% |
| Shortage of labor | 2 | 2% |
| Good Delivery | 93 | 93% |
Chart
Distributor 2
| Event | Frequency | Probability |
| Downtime in Factory | 1 | 1% |
| Defective Materials | 3 | 3% |
| Failure to Meet Specifications | 1 | 1% |
| Lack of Transport | 2 | 2% |
| Shortage of labor | 2 | 2% |
| Good Delivery | 91 | 91% |
Chart
Distributor 2
| Event | Frequency | Probability |
| Downtime in Factory | 1 | 1% |
| Defective Materials | 3 | 3% |
| Failure to Meet Specifications | 1 | 1% |
| Lack of Transport | 2 | 2% |
| Shortage of labor | 2 | 2% |
| Good Delivery | 91 | 91% |
Chart
Distributor 3
| Event | Frequency | Probability |
| Downtime in Factory | 2 | 2% |
| Defective Materials | 1 | 1% |
| Failure to Meet Specifications | 1 | 1% |
| Lack of Transport | 2 | 2% |
| Shortage of labor | 3 | 3% |
| Good Delivery | 91 | 91% |
Chart
Retail
The simulation of the retail evaluates the number of vehicles that can be supplied to the company’s nine retailers in each week.
Retailer 1-1 (Bas)
| Event | Frequency | Probability |
| Downtime in Factory | 2 | 2% |
| Defective Materials | 1 | 1% |
| Failure to Meet Specifications | 1 | 1% |
| Lack of Transport | 2 | 2% |
| Shortage of labor | 3 | 3% |
| Good Delivery | 91 | 91% |
Chart
Retailer 1-2 (Jab)
| Event | Frequency | Probability |
| Downtime in Factory | 2 | 2% |
| Defective Materials | 2 | 2% |
| Failure to Meet Specifications | 1 | 1% |
| Lack of Transport | 1 | 1% |
| Shortage of labor | 1 | 1% |
| Good Delivery | 93 | 93% |
Chart
Retailer 1-3 (Dair)
| Event | Frequency | Probability |
| Downtime in Factory | 3 | 3% |
| Defective Materials | 2 | 2% |
| Failure to Meet Specifications | 1 | 1% |
| Lack of Transport | 2 | 2% |
| Shortage of labor | 1 | 1% |
| Good Delivery | 91 | 91% |
Chart
Retailer 2-1 (Sen)
| Event | Frequency | Probability |
| Downtime in Factory | 1 | 1% |
| Defective Materials | 2 | 2% |
| Failure to Meet Specifications | 1 | 1% |
| Lack of Transport | 3 | 3% |
| Shortage of labor | 1 | 1% |
| Good Delivery | 92 | 92% |
Chart
Retailer 2-2 (Zak)
| Event | Frequency | Probability |
| Downtime in Factory | 1 | 1% |
| Defective Materials | 3 | 3% |
| Failure to Meet Specifications | 1 | 1% |
| Lack of Transport | 2 | 2% |
| Shortage of labor | 1 | 1% |
| Good Delivery | 92 | 92% |
Chart
Retailer 2-3 (Al)
| Event | Frequency | probability |
| Downtime in Factory | 1 | 1% |
| Defective Materials | 1 | 1% |
| Failure to Meet Specifications | 2 | 2% |
| Lack of Transport | 1 | 1% |
| Shortage of labor | 2 | 2% |
| Good Delivery | 93 | 93% |
Chart
Retailer 3-1 (Mos)
| Event | Frequency | Probability |
| Downtime in Factory | 1 | 1% |
| Defective Materials | 3 | 3% |
| Failure to Meet Specifications | 1 | 1% |
| Lack of Transport | 2 | 2% |
| Shortage of labor | 2 | 2% |
| Good Delivery | 91 | 91% |
Chart
Retailer 3-2 (Mar)
| Event | Frequency | Probability |
| Downtime in Factory | 2 | 2% |
| Defective Materials | 1 | 1% |
| Failure to Meet Specifications | 1 | 1% |
| Lack of Transport | 2 | 2% |
| Shortage of labor | 3 | 3% |
| Good Delivery | 91 | 91% |
Chart
Retailer 3-3 (Mes)
| Event | Frequency | Probability |
| Downtime in Factory | 2 | 2% |
| Defective Materials | 1 | 1% |
| Failure to Meet Specifications | 1 | 1% |
| Lack of Transport | 2 | 2% |
| Shortage of labor | 3 | 3% |
| Good Delivery | 91 | 91% |
Chart
Analysis
The simulations shows there will not be any shortage in the delivery of tires. There will be a shortage in the delivery of 202 engines, 30 chassis, 7 front and back windshields, and 88 batteries. The company will also have be unable to assemble 7 vehicles. Among distributors, there will be a shortage in delivery by 5, 18, and 11 to distributor 1, 2, and 3 respectively. Similarly, there will be a delivery shortage of 13, 5, 7, 4, 4, 3, 13, and 5 to retailer Jab, Dair, Sen, Zak, Al, Mos, Mar, and Mes.
Discussion and Recommendation
The company should increase its production capacity in the assembly to avoid delays in the completion of vehicles. It should also increase its order quantities and suppliers of similar parts to minimize cases of shortages in supply. Finally, it should increase its outputs and transport providers to minimize cases of delays in delivery of finished goods to suppliers.
Conclusion
Although the company has only a few unfulfilled orders, it should increase its production capacities in order to fulfil all its orders within the given deadlines. Additionally, it should increase the number of its suppliers so that it can have all the parts needed for car assembly in good time. Finally, it should increase its transporters so that it can be punctual in the delivery of orders.
Appendix
- Tires
| Tires Delivered | |
| Actual Goods Delivered | 12480 |
| Average Weekly Delivery | 240 |
| Expected Delivery | 12480 |
| Delivery Shortage | 0 |
- Engines
| Engines Delivered | |
| Actual Goods Delivered | 2242 |
| Average Weekly Delivery | 43.115385 |
| Expected Delivery | 2444 |
| Delivery Shortage | 202 |
- Chassis/Frame
| Chassis Delivered | |
| Actual Goods Delivered | 2414 |
| Average Weekly Delivery | 46.423077 |
| Expected Delivery | 2444 |
| Delivery Shortage | 30 |
- Front and Back Windshield
| Front and Back Windshields Delivered | |
| Actual Goods Delivered | 4881 |
| Average Weekly Delivery | 93.865385 |
| Expected Delivery | 4888 |
| Delivery Shortage | 7 |
- Batteries
| Batteries Delivered | |
| Actual Goods Delivered | 2356 |
| Average Weekly Delivery | 45.3076923 |
| Expected Delivery | 2444 |
| Delivery Shortage | 88 |
- Assembly
| Cars Completed in Assembly Line | |
| Actual Goods Delivered | 2437 |
| Average Weekly Delivery | 46.8653846 |
| Expected Delivery | 2444 |
| Delivery Shortage | 7 |
- Distributor 1
| Cars Delivered to Distributor 1 | |
| Actual Goods Delivered | 1035 |
| Average Weekly Delivery | 19.903846 |
| Expected Delivery | 1040 |
| Delivery Shortage | 5 |
- Distributor 2
| Distributor 2 Delivery | |
| Actual Goods Delivered | 762 |
| Average Weekly Delivery | 14.6538462 |
| Expected Delivery | 780 |
| Delivery Shortage | 18 |
- Distributor 3
| Distributor 3 Delivery | |
| Actual Goods Delivered | 873 |
| Average Weekly Delivery | 16.788462 |
| Expected Delivery | 884 |
| Delivery Shortage | 11 |
- Retail 1-1 (Bas)
| Retail 1-1 (Bas) Delivery | |
| Actual Goods Delivered | 260 |
| Average Weekly Delivery | 5 |
| Expected Delivery | 260 |
| Delivery Shortage | 0 |
- Retail 1-2 (Jab)
| Retail 1-2 (Jab) Delivery | |
| Actual Goods Delivered | 455 |
| Average Weekly Delivery | 8.75 |
| Expected Delivery | 468 |
| Delivery Shortage | 13 |
- Retail 1-3 (Dair)
| Retail 1-2 (Dair) Delivery | |
| Actual Goods Delivered | 359 |
| Average Weekly Delivery | 6.90384615 |
| Expected delivery | 364 |
| Delivery Shortage | 5 |
- Retail 2-1 (Sen)
| Retail 2-1 (Sen) Delivery | |
| Actual Goods Delivered | 253 |
| Average Weekly Delivery | 4.8653846 |
| Expected delivery | 260 |
| Delivery Shortage | 7 |
- Retail 2-2 (Zak)
| Retail 2-2 (Zak) Delivery | |
| Actual Goods Delivered | 152 |
| Average Weekly Delivery | 2.92307692 |
| Expected Delivery | 156 |
| Delivery Shortage | 4 |
- Retail 2-3 (Al)
| Retail 2-3 (Al) Delivery | |
| Actual Goods Delivered | 152 |
| Average Weekly Delivery | 2.9230769 |
| Expected Delivery | 156 |
| Delivery Shortage | 4 |
- Retail 3-1 (Mos)
| Retail 3-1 (Mos) Delivery | |
| Actual Goods Delivered | 257 |
| Average Weekly Delivery | 4.9423077 |
| Expected Delivery | 260 |
| Delivery Shortage | 3 |
- Retail 3-2 (Mar)
| Retail 3-2 (Mar) Delivery | |
| Actual Goods Delivered | 351 |
| Average Weekly Delivery | 6.75 |
| Expected Delivery | 364 |
| Delivery Shortage | 13 |
- Retail 3-3 (Mes)
| Retail 3-3 (Mes) Delivery | |
| Actual Goods Delivered | 203 |
| Average Weekly Delivery | 3.903846154 |
| Expected Delivery | 208 |
| Delivery Shortage | 5 |