Solar electric supply chain disruption

i SOLAR ELECTRIC SUPPLY CHAIN DISRUPTION BY ELIAS GONZALEZ GOMEZ INDUSTRIAL TECHNOLOGY & MANAGEMENT Submitted in partial fulfillment of the requirements for the degree of Master of Industrial Technology and Operations in Industrial Technology and Management in the Graduate College of the Illinois Institute of Technology Supervised by Dr. Daniel Tomal Chicago, Illinois 07 2023 ii ACKNOWLEDGEMENT I would like to extend my heartfelt appreciation and thanks to the individuals and organizations who have played a significant role in the completion of this research project on solar electric supply chain disruption and the case of Continental Energy. First and foremost, I am very grateful to the entire team at Continental Energy for their support and cooperation throughout this project. Their invaluable insights, expertise, and willingness to share their experiences have been instrumental in shaping my understanding of the solar electric supply chain and identifying areas for improvement. I would like to express my deepest gratitude to my research advisor, Dr Dan, for his continuous guidance, encouragement, and invaluable input. His expertise in project management and renewable energy has been a constant source of inspiration and has helped shape this research in a meaningful way. Furthermore, I am grateful to the academic community, research institutions, and scholarly publications for their wealth of information and resources. Their contributions have been invaluable in shaping the foundation of this research. I would like to acknowledge and thank my family, friends, and loved ones for their unwavering support, understanding, and encouragement throughout this research journey. Their belief in me and their patience during challenging times have been a constant source of motivation. Lastly, I want to express my heartfelt appreciation to all the individuals whose contributions may not be mentioned here but have been instrumental in this research project. Your support, insights, and encouragement have made this endeavor possible. Thank you all for your invaluable contributions and support. Elias P. Gonzalez Gomez iii TABLE OF CONTENTS Page ACKNOWLEDGEMENT ....................................................................................... ii LIST OF TABLES ................................................................................................... v LIST OF FIGURES ................................................................................................. vi LIST OF EQUATIONS ........................................................................................... vii ABSTRACT ............................................................................................................. viii CHAPTER 1. INTRODUCTION .............................................................................. 9 1.1 DESCRIPTION ................................................................................. 10 1.2 OBJECTIVES .................................................................................... 11 1.3 SCOPE .............................................................................................. 13 2. CHALLENGES OF SOLAR ELECTRIC SUPPLY CHAIN ............ 16 2.1 STATE OF THE ART .......................................................................... 16 2.1.1 BACKGROUND OF SOLAR ENERGY .................................... 16 2.1.2 SOLAR PV PANELS .................................................................. 21 2.1.3 PV PANELS MANUFACTURING PROCESS .......................... 23 2.2 MAIN SUPPLY CHAIN DISRUPTORS ............................................. 25 2.2.1 SUPPLY CHAIN ........................................................................ 26 2.2.2 SUPPLY CHAIN DISRUPTORS................................................ 28 3. PRACTICAL CASE: CONTINENTAL ELECTRIC .............................. 31 3.1 PURPOSE OF CONTINENTAL ELECTRIC .................................. 31 3.2 SUPPLY CHAIN ANALYSIS ............................................................. 33 iv 4. SOLUTIONS ...................................................................................... 50 4.1 IMPLEMENTATION OF POTENTIAL SOLUTIONS ...................... 50 4.1.1 NETWORK PLANNING ............................................................ 53 4.1.2 INVENTORY MANAGEMENT ............................................ … 66 4.1.3 SUPPLY CONTRACTS .............................................................. 72 5. IMPACT OF THIS IMPLEMENTATION .............................................. 78 5.1 ECONOMIC IMPACT ...................................................................... 78 5.2 ENVIRONMENTAL IMPACT ............................................................ 80 6. CONCLUSIONS ………………………………………………..……. 83 REFERENCES ............................................................................................................. 86 BIBLIOGRAPHY ......................................................................................................... 89 v LIST OF TABLES Table 1 Timeline of the project ............................................................................... 14 Table 2 Disruptors of Continental Electric’s Solar PV Supply Chain .................... 49 Table 3 ABC analysis of different PV panel suppliers ........................................... 51 Table 4 Distances between Port and Headquarters ................................................. 56 Table 5 Total distance between Headquarters and installations ............................. 58 Table 6 Monthly expenses for PV transportation: Headquarters to installations .. 60 Table 7 Total monthly expenses for PV transportation .......................................... 60 Table 8 Distances between Port and Headquarters/Warehouse .............................. 63 Table 9 Monthly expenses for PV road transportation with new system ............... 63 Table 10 Total monthly expenses for PV transportation with new system ............ 64 Table 11 Comparison between monthly expenses of new and existing network ... 64 Table 12 Lead Times savings in Miles and Days ................................................... 65 Table 13 Lead Time improvement .......................................................................... 65 Table 14 Calculation oh holding costs .................................................................... 69 Table 15 Calculation of Inventory Management parameters .................................. 72 vi LIST OF FIGURES PAGE Figure 1 Radiation in solar panels .......................................................................... 18 Figure 2 Example of CSP with a central tower....................................................... 20 Figure 3 Example of a flat plate collector ............................................................... 20 Figure 4 Example of evacuated tube collectors ...................................................... 21 Figure 5 Example of solar air heater system ........................................................... 21 Figure 6 Stages of PV panels processing ................................................................ 25 Figure 7 Evolution of the Supply Chain Techniques .............................................. 26 Figure 8 Continental Electric’s Headquarters ......................................................... 31 Figure 9 Quantity of TEU containers yearly transported per country .................... 40 Figure 10 Projection of lithium demand from 2019 to 2030 .................................. 44 Figure 11 Distribution of customer’s worksite location ......................................... 53 Figure 12 Location of current Continental Energy Headquarters and Warehouse… 54 Figure 13 Distribution of 4 main installations to compute freight costs................. 55 Figure 14 Newark Elizabeth Port in New Jersey .................................................... 56 Figure 15 Railroad map for CSX Intermodal ......................................................... 57 Figure 16 Railroad map for Norfolk Southern ........................................................ 57 Figure 17 New potential warehouse location in Ohio ............................................ 61 Figure 18 Inventory’s behavior with time .............................................................. 62 Figure 19 Relation between parameter Z and service level .................................... 70 vii List of EQUATIONS PAGE Equation 1 Calculation of Continental Energy’s monthly demand for railcars ...... 58 Equation 2 Formula to compute expenses on PV panels transportation from New Jersey to Headquarters .................................................................................... 59 Equation 3 Calculation of expenses on PV panels transportation from New ........ Jersey to Headquarters .................................................................................... 59 Equation 4 Calculation of monthly demand for Full Truckloads. .......................... 59 Equation 5 Formula for calculating the square footage for the new warehouse. .... 62 Equation 6 Calculation of Square footage for the new warehouse ......................... 62 Equation 7 Calculation of monthly warehouse expenses. ...................................... 63 Equation 8 Formula for computing Safety stock .................................................... 70 Equation 9 Calculation of Safety stock. .................................................................. 70 Equation 10 Formula for computing Reorder Level. .............................................. 70 Equation 11 Calculation of Reorder Level. ............................................................ 70 Equation 12 Formula for computing order size Q... ............................................... 70 Equation 13 Formula for computing parameter k... ................................................ 71 Equation 14 Calculation of order size Q. ................................................................ 71 Equation 15 Formula for computing Average inventory level ............................... 71 Equation 16 Calculation of Average inventory level. ............................................. 71 Equation 17 Formula of Return On Investment. ..................................................... 79 Equation 18 Calculation of Return On Investment. ................................................ 80 viii ABSTRACT This research project focuses on solar electric supply chain disruption and examines the case of Continental Energy, a company specialized in the management and installation of solar PV panels. The project aims to identify and address key challenges within the supply chain to ensure smooth operations, efficient delivery of PV panels, and customer satisfaction. Through a comprehensive analysis of the supply chain network, inventory management techniques, and the implementation of appropriate supply contracts, the project proposes solutions to optimize processes and mitigate disruptions. Furthermore, the economic and environmental impacts of these proposed solutions are evaluated, considering factors such as cost savings, energy efficiency, and sustainability. The project concludes with a comprehensive assessment of the improvements implemented and their potential benefits for Continental Energy's solar electric supply chain. The findings contribute to the understanding of supply chain management strategies in the renewable energy sector and provide insights for companies aiming to enhance their operational efficiency and sustainability in a rapidly evolving industry. 9 CHAPTER 1 INTRODUCTION Solar energy is one of the 1 fastest-growing sources of renewable energy, with the potential to power millions of homes and businesses around the world. The solar electric supply chain is complex and can be easily 2 disrupted and can incur to delays, increased costs, and reduced availability of solar products. Currently, the solar electric supply chain is facing several challenges, including supply chain bottlenecks, raw material shortages, and transportation disruptions. These challenges can impact the delivery of solar projects and lead to increased costs, delays, and lost opportunities for businesses and consumers. The impact of disruption in the solar electric supply chain can be far-reaching, affecting not just the renewable energy sector but also the wider economy. A disrupted supply chain can lead to a reduction in the number of jobs, decreased economic growth, and an increase in carbon emissions as businesses turn to less sustainable sources of energy. However, many experts on the topic are striving to find solutions to these issues. Technological innovations such as blockchain, digital twins, supply chain management and artificial intelligence can be used to mitigate the impact of supply chain disruptions. These solutions can help to increase visibility and traceability in the supply chain, reduce waste, and improve efficiency. One example of a recent case of solar electric supply chain disruption could be Tesla. Tesla has been expanding its solar energy business in recent years, with a focus on residential solar panels and energy storage products. However, in 2021, the company 3 faced challenges with the supply chain for these products. Tesla's CEO Elon Musk tweeted that the company was "supplyconstrained on battery cells and other parts," and that it was "difficult to predict" when the supply chain issues would be resolved. These supply chain issues have resulted in delays in the delivery and installation of Tesla's solar panels and energy storage products. In some cases, customers have had to wait for several months to receive their orders. The company has also had to adjust its pricing and sales strategy in response to the supply chain challenges. 1 World Economic Forum, Energy transition: These are the key factors driving the growth of renewable energy. article (6th October 2021). Retrieved from Which factors accelerate the growth of renewable energy? | World Economic Forum (weforum.org) 2 World Economic Forum, Supply Chains: Why are supply chains facing disruptions, and how long will they last?, article (5th July 2022). Retrieved from Global supply chains face the worst disruptions in decades | World Economic Forum (weforum.org) 3 Insider: Elon Musk says pandemic supply-chain issues and a global microchip shortage resulted in insane difficulties for Tesla article (26th April 2021). Retrieved from Elon Musk Says Shortages Caused 'Insane Difficulties' for Tesla (businessinsider.com) 16 CHAPTER 2 CHALLENGES OF SOLAR ELECTRIC SUPPLY CHAIN The purpose of this new chapter is to provide some insight into the principles of solar energy and the solar energy industry to gain some knowledge on how solar panels work and their manufacturing processes. Specifically, the background of the solar energy will be explained, covering the energy conversion processes, incoming solar panels’ radiation and the different types of solar power plants available in the market. After this general context, the focus will be on the study of the solar PV panels, which is the core technology used in Continental Electric and the supply chain that wants to be analyzed in this project. The basic understanding of these concepts will allow later in this chapter to link the supply chain concept to the solar PV manufacturing industry and find out the main supply chain disruptors. 2.1 STATE OF THE ART Solar energy has emerged as a promising source of renewable energy due to its sustainability and its potential to reduce dependence on fossil fuels. At the core of solar energy are solar panels, which capture sunlight and convert it into electricity. Solar panels consist of several key parts, including photovoltaic cells, a frame, a glass cover, and wiring. These parts work together to generate electricity from the sun's energy. The manufacturing process of solar panels involves several stages, including the production of raw materials, wafer and cell production, module assembly, and testing. In this section, we will explore the workings of solar panels, the key components that make up solar panels, and the manufacturing process involved in their production. 2.1.1 Background of solar energy Solar energy Solar energy is a renewable energy source that uses the radiant heat and light coming from the sun to convert it into useful energy. The main reason why it is considered renewable is because it is derived from the sun, which is a virtually infinite source of energy. Unlike fossil fuels, which are finite and will eventually be depleted, solar energy is constantly being replenished. The sun's energy is expected to last for billions of years, meaning that solar power will remain a viable source of energy for the foreseeable future. Moreover, solar energy 17 is considered a clean and sustainable source of energy, as it does not produce harmful emissions or pollutants that can damage the environment or contribute to climate change. Radiation phenomena As it is known, not all the beams coming from the sun in the form of irradiation (if talking about power) or irradiance (if talking about the energy) can be used by solar panels to produce energy. There is a significant part of them that are lost due to the 9 reflection, conduction, and the absorption of the beam when impacting against the ozone layer: • Reflection: When a beam of sunlight hits the ozone layer, some of the light may be reflected back towards space. This happens when the angle of incidence is such that the light is reflected off the ozone layer without penetrating it. This is similar to how light reflects off a mirror or other reflective surface. • Absorption: When a beam of sunlight hits the ozone layer, some of the light may be absorbed by the ozone molecules. This absorption causes the molecules to become excited and move to a higher energy state. This energy can be released as heat or light, which can further interact with other molecules in the atmosphere. • Conduction: When a beam of sunlight hits the ozone layer, some of the energy from the light may be conducted through the layer and into the atmosphere. This can cause the surrounding air to become warmer, which can affect atmospheric processes such as convection and turbulence. It's important to note that these three scenarios can occur simultaneously and are not mutually exclusive. The exact proportions of reflection, absorption, and conduction will depend on various factors such as the angle of incidence, the wavelength of the light, and the properties of the ozone layer and surrounding atmosphere. This percentage of beams that can successfully penetrate the ozone layer and get into the atmosphere are commonly known as Ultraviolet Radiation (UV radiation) and are the ones with shorter wavelengths than the visible light. Solar power plants radiation 9 Francesc Guinjoan, Electronic Engineering Department – Universitat Politecnica Catalunya: Solar Energy PV, Renewable Energy Course, essay. 18 This former radiation is now susceptible to being used by solar power plants. They will receive different kinds of 10 beams arriving towards the panels’ surface: • Direct radiation: it is the radiation from the sun that passes in a straight line through the atmosphere to the receiver. • Diffused radiation: it is supposed to be the solar radiation reaching the Earth’s surface after having been scattered from the direct solar beam by molecules or particles in the atmosphere. Clouds strongly increase this component. • Reflected radiation: it is also known as Albedo radiation, is the sum of the direct and diffuse radiation that is reflected by the Earth’s surface towards the receiver. Figure 1. Radiation in solar panels. (Source: ResearchGate.net). Solar power plants technologies Nowadays, there are 3 main types of solar equipment available in the market that have been classified depending on their technology, applications, and characteristics: solar thermal, solar thermodynamic and solar photovoltaic (PV): • Solar thermal plants use mirrors or lenses to concentrate sunlight onto a small area, creating intense heat that can be used to generate electricity. The heat is used to produce steam, which drives a turbine to generate electricity. Solar thermal plants are typically large-scale power plants that require a large amount of space and high levels of sunlight. They are well-suited for areas with high levels of direct sunlight, such as deserts, and are often used in utility-scale applications to generate large amounts of electricity. 10 Francesc Guinjoan, Electronic Engineering Department – Universitat Politecnica Catalunya: Solar Energy PV, Renewable Energy Course, essay. 19 • Solar thermodynamic plants are similar to solar thermal plants, but they use a different process to generate electricity. They use a heat transfer fluid (such as molten salt or special types of oils) to transfer heat from the sun to a power block, which then generates electricity using a steam turbine. Solar thermodynamic plants are typically smaller and more flexible than solar thermal plants, making them well-suited for smaller-scale applications. Among its main uses, it stands out generating heat for a solar domestic heat water or solar pool heating systems. • Solar photovoltaic plants use photovoltaic cells to convert sunlight directly into electricity. These cells are made from semiconductor materials such as silicon and are typically arranged in modules to form a solar panel. When sunlight hits the PV cells, it creates an electric field that allows electrons to flow and generate electricity. Solar PV plants are typically smaller and more flexible than solar thermal or solar thermodynamic plants and can be installed on rooftops, in large-scale solar farms, or as portable solar devices such as solar-powered chargers. The main differences between these three types of solar power plants are the technology they use to generate electricity, their size and scalability, and their applications. Solar thermal and thermodynamic plants are typically larger and more suited for utilityscale applications, while solar PV plants are smaller and more suited for distributed energy applications. Additionally, solar thermal and thermodynamic plants are typically better suited for areas with high levels of direct sunlight, while solar PV plants can operate in a wider range of conditions. Finally, solar thermal and thermodynamic plants use heat to generate electricity, while solar PV plants directly convert sunlight into electricity. Some examples of these kind of solar power plants can be found in the following paragraphs: o Concentrated solar power (CSP) - This technology uses mirrors or lenses to concentrate sunlight onto a small area, creating intense heat that can be used to generate electricity. The heat is used to produce steam, which drives a turbine to generate electricity. 20 Figure 2. Example of CSP with a central tower. (Source: ResearchGate.net). o Flat plate collectors - These collectors are typically used for residential hot water systems. They consist of a flat, insulated box with a dark-colored absorber plate inside. When sunlight hits the plate, it heats up and transfers the heat to a fluid flowing through pipes in the box. Figure 3. Example of flat plate collector. (Source: Innergy.com) o Evacuated tube collectors - These are similar to flat plate collectors, but they use a series of glass tubes to reduce heat loss and improve efficiency. 21 Figure 4. Example of evacuated tube collectors. (Source: Innergy.com) o Solar air heating - This technology uses air as the heat transfer medium, typically in a space heating system. The air is heated by sunlight passing through a collector, and then circulated through the building using fans or ducts. Figure 5. Example of solar air heater system. (Source: Innergy.com). 2.1.2 Solar PV Panels After having reviewed the principles of solar energy and understood the main types of solar power plants, it is now time to focus on the specific technology that Continental Electric manages daily. The aim of this section is to describe the main parts that compound solar 22 photovoltaic panels (also known as PV panels) and gain some knowledge about the basic operation concepts and standards. PV Conversion chain A solar PV panel is a device that converts sunlight into electricity. It is made up of solar cells, which are semiconductor devices that absorb photons from the sun and release electrons, creating an electric current. Contrary to a solar thermal panel, which intention is to reflect the light and concentrate the heat into a specific point, a PV panel goal is to produce energy by means of the photovoltaic effect. The basic structure of a PV solar panel consists of several layers of different materials. The top layer is made of a transparent material, such as glass or plastic, that allows sunlight to pass through. The next layer is the PV layer, which is made up of several individual solar cells. Each solar cell consists of two layers of silicon that have been doped with different impurities to create a p-n junction. This junction creates an electric field that separates the electrons and holes, allowing them to flow in opposite directions and generate a current. The current generated by each solar cell is typically small, so multiple cells are connected to form a module, and multiple modules are connected in series and parallel to form a PV array or PV generator. With this generated power, PV arrays can supply different loads: - Electrical loads - To charge batteries - Inject energy to the main grid. PV systems classification PV solar panels are commonly used in residential, commercial, and utility-scale applications to generate clean, renewable energy from the sun. They are a popular option for those looking to reduce their carbon footprint and save money on energy bills over the long term. Depending on their applications and connection system with the grid, they can be classified as follows: o Off-grid PV systems: not connected to the mains, used for stand-alone applications. They should use batteries. o Grid-connected systems: The system is connected to the grid and can inject or extract power from the mains. 23 o Hybrid systems: In these cases, at least an additional power source is present (wind, diesel, …). Can be off-grid or grid-connected. 2.1.3 PV Panels manufacturing’s process After reviewing the different available solar technologies and understanding the basics of solar PV panels it is time to focus on their manufacturing processes. The purpose of this section is to learn about the various manufacturing stages of a solar PV panel and try to evaluate later the impact of these into the supply chain of Continental Electric. The 11 PV manufacturing processes involves several complex stages that require specialized equipment, skilled labor, and precision engineering. The main stages of the PV panel manufacturing process involve: - Silicon production: The first step in producing PV panels is to create high-purity silicon, a process that is expensive, energy-intensive, and produces significant greenhouse gas emissions. This process involves heating and melting raw silicon with other materials to create a purified silicon ingot. To manufacture the fine-grained crystalline silicon product called polysilicon, methods relying on highly reactive gases, such as hydrogen and chlorine, are used. The Siemens process and the floating bead method are two commonly used methods for producing polysilicon. In the Siemens process, a silicon-hydrogen-chlorine compound gas passes over a heated silicon filament, breaking the molecular bonds and depositing the silicon atom on the filament, which ultimately grows into a large U-shaped polysilicon rod. The filament itself is also made of pure silicon to avoid contamination. In the floating bead method, small silicon beads sit at the bottom of an inverted cone-shaped vessel where a compound gas of silicon and hydrogen is pumped in, causing the small beads to float near the surface. The heating of the vessel breaks the silicon-hydrogen bonds, causing the silicon atoms to deposit onto the small beads until they become too heavy to float and drop to the bottom of the vessel where they are harvested, ready for use. - Wafer production: In the next stage of PV panel manufacturing, the purified silicon ingot is sliced into thin wafers using a diamond wire saw or other methods. However, 11 Solar Energy Technologies Office: Solar photovoltaic manufacturing basics, website. Retrieved from Solar Photovoltaic Manufacturing Basics | Department of Energy 24 this process can be costly and result in a high degree of material loss. The diamond wire saws used in the wafer production process can be expensive to acquire and maintain, and the cutting process can result in a high degree of material loss, reducing the overall efficiency and profitability of the process. Another method involves turning polysilicon into wafers by heating it until it forms a liquid mass, then growing a large cylindrical ingot of monocrystalline silicon in the Czochralski process or forming a large-grained multicrystalline-silicon ingot in the directional solidification process. After that, silicon ingots are sliced into very thin wafers using diamond-coated wire saws. The silicon sawdust created in the process is called kerf. While kerfless wafer production can be achieved by pulling cooled layers off a molten bath of silicon or by depositing a thin layer of silicon atoms onto a crystalline template using gaseous silicon compounds. - Cell production: The wafer is then coated with a thin layer of phosphorus to create a positive charge on one side and a negative charge on the other. The wafer is then baked to create a permanent electrical field. The difficulties associated with this stage are primarily related to the quality control and consistency of the process. Defects in the silicon or cell production process can lead to reduced efficiency or even complete failure of the panel, which can result in significant losses for manufacturers. - Module assembly: After the silicon wafers have been produced, they are arranged in a specific pattern and sealed between two sheets of glass or plastic to create a PV panel. The panels are then wired together to create an array capable of producing usable electricity. At a module assembly facility, copper ribbons plated with solder connect the silver busbars on the front surface of one cell to the rear surface of an adjacent cell in a process known as tabbing and stringing. The interconnected set of cells is arranged face-down on a sheet of glass covered with a sheet of polymer encapsulant. A second sheet of encapsulant is placed on top of the face-down cells, followed by a tough polymer backsheet or another piece of glass. The whole stack of materials is laminated in an oven to make the module waterproof, then fitted with an aluminum frame, edge sealant, and a junction box in which the ribbons are connected to diodes that prevent any backward flow of electricity. The difficulties associated with this stage are 25 primarily related to the cost, quality control, and skilled labor required for the manufacturing process. The materials used to create the PV panel can be expensive, and defects in the manufacturing process can lead to reduced efficiency or complete failure of the panel, resulting in significant losses for manufacturers. Additionally, specialized equipment and skilled labor are necessary to ensure high-quality control during the manufacturing process. Figure 6. Stages of PV panels processing. (Source: Dawtec.com). The mounting and commissioning processes that follow the production of solar panels will not be discussed in this project as they are beyond its scope, as was explained at the beginning of the project. The project will only analyze the lead times from when the panels are ordered to when they are delivered and ready to be installed, excluding the installation processes of mounting and commissioning. As has been explained, the different manufacturing stages need to be done within strict limits and tolerance, high amounts of resources (energy, temperature, …) and with limited and high-priced materials. These factors added to the inner complexity of the processes enhance the possibility of supply chain disruptions within the solar electric industry. 2.2 MAIN SUPPLY CHAIN DISRUPTORS After having reviewed solar electric PV panels main characteristics and explored the manufacturing process involved in their production it is now time to link these concepts to the core of the project: the supply chain disruptors of the PV panels from Continental Electric. To do that, some insight into the supply chain basic concepts will be provided in this section, as well as the existing disruptors that may arise in any supply chain. 32 of the company, they employ over 500 people. They have a large and experienced team of electricians, engineers, project managers, and support staff to handle a wide range of projects. To manage these various projects the company has been organized as follows: • Engineering Department: This department is responsible for designing and planning electrical systems, including power distribution, lighting, and communication systems. They also conduct feasibility studies and provide technical support for ongoing projects. • Estimating Department: The estimating department is responsible for analyzing project plans and specifications and preparing cost estimates for materials, labor, and equipment. They work closely with the engineering department to ensure accurate estimates. • Project Management Department: This department is responsible for overseeing the planning, execution, and completion of projects. They work closely with the estimating department to ensure projects are completed on time and within budget. • Purchasing Department: The procurement department is responsible for purchasing and managing the inventory of materials, equipment, and supplies needed for projects. They work closely with the estimating department to ensure that the required materials are available at the right time and at the best prices. • Field Operations Department: This department is responsible for the installation, testing, and commissioning of electrical systems on site. They work closely with the project management department to ensure that projects are completed according to plan. • Safety Department: The safety department is responsible for ensuring that all employees and contractors work in a safe and healthy environment. They develop and enforce safety policies and procedures and provide training to employees and contractors. • Accounting Department: The accounting department is responsible for managing the company's finances, including invoicing, accounts payable, accounts receivable, and financial reporting. Because of the different functions the company has, and its size, the company decided to create a specific subsidiary company to manage the PV solar projects. Therefore, the focus will be on a specific branch of the business, called Continental Energy Solutions, which is the part responsible for the design, installation and commissioning of solar PV arrays and battery storage solutions: 33 - This specific team involves about 60 workers, including office and field personnel. - Their offices are in Oak Brook as happens with the biggest part of the group, and they also have one warehouse. They only store there their main tools, machinery or special equipment for the projects. - Regarding the kinds of project they do, they only perform grid-connected installations, which means that all installations are for commercial or industrial clients, not domestic installations. - The biggest part of the projects is carried out in the northern part of Illinois, Indiana, Ohio, Wisconsin, Virginia and Pennsylvania. - Regarding their suppliers and tool providers, they are mostly located on the West and East coast of the US. 3.2 SUPPLY CHAIN ANALYSIS Once Continental Electric has been introduced into the project, it is time to get deeper into their procedures and learn about the main processes of the company and their supply chain management. The aim of this section is to explain and analyze the challenges the company is facing due to both internal and external inefficiencies in the form of disruptors. OPERATIONAL DISRUPTORS This first part will delve into the operational disruptions that are affecting Continental Electric’s PV panels supply chain. Operational disruptors were those related to the company’s supply chain and are identified as main internal issues such as procedure inefficiencies, equipment failure and quality problems or inventory shortages. Some of the operational disruptors that have been identified within Continental Energy are: Purchasing procedures It is a fact that in most current companies, the majority of purchases must be authorized by the company’s management before ordering them. It is a control tool that companies use to ensure that employees are following the guidelines provided by high executives and to keep the project’s budget on track. However, the case of Continental Electric is extreme and has too many internal stages that need to be done before the approval for the purchase order. Specifically, the purchase request must meet the following criteria: 34 • Providers or suppliers offers: the purchase request must be submitted with at least 4 more offers from different suppliers, with different paperwork regarding delivery time, total price, shipping price and health and safety regulatory compliance with the company. In some cases, it can be tedious to find more than 5 companies that are able to provide you with the service or goods you are looking for. That’s why in various projects, the company has spent more time looking for alternative providers rather than receiving the supplies when the order was purchased. • Company’s compliance: The supplier or provider must be registered on the internal software of the company, which is a process that if hasn’t been performed previously for that supplier, may take up to 10 or 15 business days. • Multiple approvals: Must be approved by the technician who has the need, the purchasing technician, the purchasing manager, the business unit manager, and depending on the amount of money that the purchase requires, may require director’s approval as well. All these intermediate steps that are required before a purchase’s approval have ended up causing delays in deliveries, product price rises and customers dissatisfaction as haven’t been capable of satisfying their need in time. Centralized purchasing department One of the defining characteristics of Continental Electric’s purchasing department is that it consists of a centralized functional, which basically means that all purchasing activities for the whole organization are handled by a single department or team. This department is responsible for managing all aspects of procurement, including vendor selection, negotiation, and purchase order management. This type of purchasing department can help streamline processes and increase purchasing power, which can lead to cost savings for the organization. However, having this purchasing commodities instead of a decentralized department in big companies such as Continental Electric has led them to different inefficiencies: • Delayed decision-making: With centralized purchasing, all decisions must go through a single department or team. This can cause delays in decision-making, especially if there is a high volume of requests. 35 • Lack of specialized knowledge: With centralized purchasing, the same department is responsible for purchasing across all areas of the organization. This can lead to a lack of specialized knowledge in specific areas, resulting in suboptimal purchasing decisions. • Resistance to change: Centralized purchasing can be resistant to change, especially if the established processes have been in place for a long time. This can lead to missed opportunities for process improvement or adopting new technologies. • Bureaucracy: Centralized purchasing can sometimes lead to bureaucracy, with multiple layers of approval and complex procedures. This can slow down the purchasing process and decrease efficiency. Inventory shortage Inventory shortage is probably one of the most common types of operational disruptors that affects most companies but also direct consumers. 18 According to recent data, approximately 60% of US citizens have experienced inability to get a certain good or product due to inventory shortage. These kinds of operational disruptions occur when there is not enough inventory to meet demand and satisfy the client’s needs, leading to lost revenue. Inventory shortages can be caused by various factors, including unexpected increases in demand, production delays or other causes. Continental Electric has identified PV panel shortages, as well as related materials such as batteries, inverters, and cabling systems, as the most significant operational disruptor for the company. In fact, the primary reason why a large portion of their projects have been delivered late to clients is due to the shortage of PV panels. Some of the root causes for these inventory shortage disruptions have been identified: • Project policies: According to the management guidelines, strategic materials such as PV panels and their related components aren’t supposed to be purchased and therefore, delivered, before the start date of a project, a fact that makes it impossible to buy or reserve any of these materials in advance. • Warehousing strategies: The company has only 1 warehouse, with the purpose of storing tools and machinery. According to the interviewed personnel, it is too small to store bigger materials like solar panels or related components, so even if the company’s policies will 18 Lydia Saad. Most US Consumers Have Felt Supply Chain Problems, article (11st August 2021). Retrieved from: Most U.S. Consumers Have Felt Supply Chain Problems (gallup.com) 36 allow their technicians to purchase these elements in advance and try to avoid potential shortages, the space to store them still wouldn’t be enough. Maybe keeping some of these materials with safety stock levels will help to mitigate risks associated with PV shortages. • Forecasting models: Forecasting is a critical aspect of a company's demand and planning process. It helps to provide insights into the future and allows companies to estimate the resources they will need in the next period. At Continental Electric, however, they did not use any forecasting model to predict the needs for PV panels. Instead, they would communicate with their customers and only try to acquire the necessary materials after closing the contract as quickly as possible. From my point of view, using time series model or mathematical models that identify patterns and consider critical factors such as level, trend and seasonality could be useful to anticipate the purchase of PV panels and avoid key materials shortages. However, some people could argue that it would be impossible to predict what type of panels should be purchased in advance to save some time and reduce lead times because each project may use different PV panels. Luckily for Continental Electric, the PV panels required for their installations are the same in approximately 80% of cases, a fact that would reduce significantly the risk involved in purchasing these kinds of materials in advance. The specific model they usually purchase is a Q-cell based solar PV formed by cells of 156 mm x 156 mm and 200 µm thickness. • Suppliers’ shortage: Continental Electric has frequently faced challenges in initiating projects due to delays in the delivery of purchased materials by suppliers. Despite providing sufficient lead time for procurement and creating the purchase order with enough time, the supply side of the process, including providers and suppliers of Continental Electric, has often encountered issues causing disruptions to project timelines. It is important to remember that PV panels are mainly conformed by semiconductor materials, as was explained in Chapter 2, which 19 current limited availability and accessibility is leading semiconductor technology-based companies to experience supply shortages with no signs of stopping. Obviously, construction companies like Continental Electric that 19 Falk Meissner. Roland Berger: Semiconductor shortage 2023: A different kind of trouble ahead, article (9th November 2022). Retrieved from: Semiconductor shortage 2023: A different kind of trouble ahead | Roland Berger 37 depend on semiconductor technology’ manufacturers will also experience the effect of their supplier’s shortage. MACROECONOMIC DISRUPTORS This second part of the supply chain analysis will delve into the macroeconomic disruptions. Just to remember what was stated in Chapter 2, macroeconomic disruptors were those challenges associated with the larger economic environment. These kinds of disruptors will typically include economic recessions, changes in currency exchange rates or other similar macroeconomic events. Economic recession The current and foreseen economic recession has been a significant macroeconomic disruptor, affecting businesses and industries across the world. According to 20 recent surveys, within the next years both companies and consumers will be overwhelmed by high inflation rates (past year achieved an historical maximum of 9.1% in June) leading them to slow their spending and investment. For Continental Electric, the challenges associated with the current recession can be significant and far-reaching: • Financial pressure of suppliers: One of the primary challenges that Continental Electric may face is the disruption of its supply chain due to financial pressures on its suppliers. If suppliers are struggling financially, they may delay or cancel orders, leading to disruptions in the supply chain. • Suppliers’ quality issues: Additionally, suppliers may have to cut corners, leading to lowerquality materials and products, which could have a downstream impact on Continental Electric's operations and reputation. • Demand fluctuation: Another challenge is the fluctuation in demand for Continental Electric's products and services. With consumers cutting back on spending during a recession, the demand for Continental Electric's products may decline, which could lead to excess inventory and financial pressures on the company. Alternatively, demand may increase for certain products due to changes in consumer behavior during a recession, 20 Christopher Rugaber. ABC News: How will we know if the US economy is in a recession, article (27th April 2023). Retrieved from: How will we know if the US economy is in a recession? - ABC News (go.com) 38 which could lead to inventory imbalances and potential stockouts if the company is not prepared to meet the increased demand. Currency exchange rates It is known that the currency exchange rate in the US hasn’t been the strongest one during the last years if compared to other currencies like the Euro. The currency exchange rate has a vital importance for companies, especially for those that perform international transactions or purchases or simply operate with international customers. Some of the issues associated with this kind of disruptor are the following: • Increased Import Costs: A weaker US dollar could make imported goods and raw materials more expensive. This can lead to higher input costs for Continental Electric, potentially impacting their profitability and increasing the prices of their products or services. • Reduced Profit Margins: If the company relies on exports as the key to overcoming a weaker US dollar exchange rate, this could make their products more competitive in international markets with lower currency values. However, if the company's expenses and operations are primarily in US dollars, the lower exchange rate may diminish their profit margins when converting foreign earnings back into US dollars. Luckily, as stated in previous chapters, the main customers of Continental Energy are in the northern part of the state of Illinois and other states such as Ohio or Indiana. Despite not representing specifically a problem for Continental Energy, the overall Continental Electric Construction group that manages international projects may have been affected by this fact. • Supply Chain Disruptions: Currency fluctuations can introduce uncertainty and volatility into global supply chains. Sudden currency devaluations can disrupt the company’s supplier relationships, increase the cost of imported components like PV solar panels and related components, or lead to delays in shipments. Such disruptions can impact the production schedules and overall efficiency of the company. Trade policy changes Trade policy changes are a kind of macroeconomic disruptor that refers to the modifications, adjustments, or reforms made by governments to the rules, regulations, and measures that govern international trade between countries. These changes can encompass a wide range of actions and policies, including tariffs and custom duties or for instance export controls 39 and sanctions. The difficulties derived from these sorts of disruptor may end up causing the following issues: • Supply Chain Complexity: Trade policy changes, such as the renegotiation of trade agreements or the introduction of new regulations, can increase the complexity of supply chains, especially for the companies that need to operate with other countries. Companies may face additional documentation requirements, customs procedures, or compliance obligations, leading to potential delays and administrative burdens in the movement of goods across borders. • Supplier Relationships: Changes in trade policies can impact relationships with suppliers, particularly if there are shifts in trade dynamics or the imposition of tariffs. Companies like Continental Electric may need to reassess their supplier networks, explore alternative sourcing options, or even consider localizing their supply chains to mitigate risks associated with trade policy uncertainties. • Market Volatility: Trade policy changes can introduce volatility and uncertainty into the market. Some companies may experience fluctuations in demand as tariffs, quotas, or trade restrictions are implemented or lifted. This can disrupt production planning and inventory management for companies like Continental Electric, requiring them to be agile and responsive to changing market conditions. • Trade Compliance Costs: Trade policy changes will probably increase compliance costs for companies, especially if there are new licensing requirements, certifications, or quality standards to meet. Companies probably will be required to invest in systems and resources to ensure compliance, which can impact their overall supply chain costs. • Trade Disputes and Geopolitical Factors: Trade policy changes can sometimes lead to trade disputes or geopolitical tensions between countries. Escalating trade conflicts, retaliatory measures, or diplomatic strains can disrupt global supply chains, increase import/export restrictions, or even lead to the reconfiguration of trade alliances. Companies like Continental Electric Construction may need to closely monitor these developments and adjust their supply chain strategies accordingly. 40 TECHNOLOGICAL DISRUPTORS This third section of the supply chain analysis will revolve around the technological disruptions. According to Chapter 2, technological disruptors were those challenges associated with changes in manufacturing processes, advancements in technology, or logistic and transportation issues. Taking into consideration this, here are some of the issues pertaining to this group that are affecting not just Continental Electric, but also other procurement and construction companies: Containers transportation issues Nowadays, the principal mode of transportation for international shipments of products, particularly in the maritime industry, is the container. In the case of strategic materials like the PV panels purchased by Continental Electric, containers are also the main transportation mode since these materials need to be transported from countries where semiconductor-based products are assembled. Since containers are constructed in conventional sizes, they can be effectively moved from one mode of transportation to another without having to be opened. Standardized containers have revolutionized the shipping and transportation sectors, making it simple to transfer goods by rail, road, and ship. This is because the containers are designed to simply fit onto various modes of transportation. Figure 9. Quantity of TEU containers yearly transported per country. (Source: Statista 2022). 41 21 According to recent data extracted from the OECD (Organization for Economic CoOperation and Development) website, the demand for TEU containers in developed countries like Germany or Netherlands has increased up to more than 30 million, adding sea and rail transport, as can be seen in the figure above. The TEU (Twenty-foot Equivalent Unit) is a standard measurement of containers of various capacities and used for characterizing the capacity of container ships or terminals. It is based on a container of 20-foot length (6.10 m) which means that one TEU is equal to one 20-foot container. Due to this increase in popularity of this transportation mode, some issues affecting global supply chains like the PV panels supply chain of Continental Electric have appeared: • Containers availability: The shortage of containers can disrupt the supply chain of PV panels and related components. Containers are crucial for the transportation of goods across long distances, especially in international trade. The scarcity of containers can lead to delays in shipping and logistics, affecting the timely delivery of PV panels and potentially impacting project schedules. Another disadvantage apart from the overall disruption of the PV panels supply chain is the higher shipping costs that container transportation-based companies may allocate to Continental Electric. The limited availability of containers can drive up shipping costs. When the demand for containers exceeds supply, shipping rates tend to rise. This can result in higher transportation expenses for companies like Continental Electric which may need to adjust their budgets and pricing accordingly. • Transoceanic container ship traffic jam: The rise in popularity of containers as the preferred transportation mode has also led to ship traffic jam issues in some of the principal maritime ports across the world like the case of 22 Suez Canal in March 2021. Some of these issues include port congestion and inefficiencies to handle more ships than the capacity of the port, vessel queue and delays outside where container ships may be forced to wait outside ports or anchor at designated waiting areas due to congestion, or even increased costs for companies like Continental Electric because in some cases extended waiting times can lead 21 Organization for Economic Co-operation and Development (OECD): Container transport (2023), website. Retrieved from: Transport - Container transport - OECD Data 22 CNBC Africa: What’s causing the container ship traffic jam clogging up global trade, article (2nd July 2021). Retrieved from: What’s Causing The Container Ship Traffic Jam Clogging Up Global Trade - CNBC Africa 48 • Higher Transportation Costs: Shipping goods over long distances typically involves higher transportation costs. Fuel expenses, freight charges, and other logistical expenses can add up, affecting the overall cost structure of the supply chain. Companies may need to factor in these increased costs when pricing their products or optimizing their supply chain networks. • Inventory Management Challenges: Managing inventory becomes more complex when there are large distances between the company and the manufacturer. Holding excessive inventory can tie up working capital and increase the risk of obsolescence or damage. On the other hand, maintaining low inventory levels increases the vulnerability to supply disruptions due to longer replenishment lead times. Finding the right balance in inventory management becomes crucial for efficient supply chain operations. • Communication and Coordination: Effective communication and coordination become more challenging when there are physical distances involved. Time zone differences, language barriers, and cultural nuances can hinder clear communication and collaborative decision-making between the company and the manufacturer. It requires establishing robust communication channels, leveraging technology, and implementing effective coordination mechanisms to bridge these gaps. • Quality Control and Product Integrity: Managing quality control and ensuring product integrity across long distances can be complex. Without proximity to the manufacturer, the company may face challenges in conducting timely inspections, monitoring production processes, and ensuring adherence to quality standards. Implementing quality assurance measures, regular audits, and maintaining strong supplier relationships are crucial to mitigating quality-related risks. As has been explained in this chapter, the modern business landscape is filled with numerous disruptors that can significantly impact supply chains. From currency exchange rate fluctuations and trade policy changes to container shortages, geographic challenges, and the depletion of fossil fuels, companies face a complex web of factors that can disrupt their supply chain operations. Additionally, the emerging threats posed by climate change and the depletion of semiconductor materials add further complexity to supply chain management. To navigate these challenges successfully, organizations must prioritize resilience, agility, and proactive planning. 49 This includes diversifying sourcing strategies, developing robust communication channels, fostering strong supplier relationships, adopting sustainable practices, and leveraging technology for enhanced visibility and optimization, but all these strategies will be reviewed more accurately in the following chapter. By understanding and addressing these disruptors head-on, companies can position themselves for a more resilient and sustainable supply chain ecosystem, ensuring their ability to meet customer demands, mitigate risks, and thrive in a dynamic business environment. Before moving forward with the following chapter, a summarizing table with all the disruptors that have been discussed during the chapter is displayed below: Table 2. Disruptors of Continental Electric’s Solar PV panels Supply Chain. DISRUPTORS Operational 1. Purchasing procedures 2. Centralized purchasing department 3. Inventory shortage 3.1 Project policies 3.2 Warehousing strategies 3.3 Forecasting models 3.4 Suppliers shortage Macroeconomic 4. Economic recession 5. Currency exchange rate 6. Trade policy changes Technological 7. Containers transportation 7.1 Containers availability 7.2 Transoceanic ship traffic jam 7.3 Rail container transportation Environmental 8. Fossil fuel depletion 9. Semiconductors depletion 10. Climate change and natural disasters Geographic 11. Suppliers location 50 CHAPTER 4 SOLUTIONS In an increasingly complex and unpredictable business environment, Continental Energy faces a range of disruptors that can significantly impact its supply chain operations. These disruptors, such as currency exchange rate fluctuations, container shortages, trade policy changes, geographic challenges, and resource depletion, pose risks and challenges that demand effective solutions. This chapter will focus on leveraging Supply Chain Management techniques as the primary tool to address and overcome these disruptors. By applying strategic sourcing, supplier diversification, optimized inventory management, advanced technology integration, collaborative partnerships, risk management practices, and sustainable initiatives, Continental Energy can build a resilient and agile supply chain. By utilizing Supply Chain Management techniques specifically tailored to combat the challenges posed by these disruptors, the company can proactively mitigate risks, enhance operational efficiency, and ensure continuity in its supply chain. This chapter aims to provide practical insights, best practices, and actionable solutions that empower Continental Energy to effectively navigate the complexities of the business landscape and drive its supply chain towards greater resilience, adaptability, and long-term success. 4.1 IMPLEMENTATION OF POTENTIAL SOLUTIONS From a Supply Chain Management perspective, there are several key strategies that are frequently used to make Supply Chains more efficient, agile, and resilient to changes or unpredictable disruptions. These strategies go from implementing a new distribution network of suppliers and providers to others radically different like renegotiating the existing supply contracts. The idea of this section is to propose a wide range of detailed Supply Chain Management strategies addressed to the specific needs of Continental Energy, taking into consideration the disruptors explained previously to deliver a clear, understandable, and effective plan to the company. With this plan, the company should be able to significantly reduce solar PV panels lead times up to at least 1% as was stated in the objectives of the project. According to some data extracted from the company, the most commonly type of panel purchased in the company is the Hanwha Q cell 400W panel. This was determined after performing an ABC analysis on the main types of panels that Continental Energy was purchasing to different suppliers: 51 Table 3. ABC analysis of different PV panel suppliers. Supplier Average price [$/W] Number of panels of 400 W purchased per year Total Marginal Percentage Accumulated Percentage Category Hanwha Q CELLS 0.85 200,000 $ 68,000,000 80% 80% A SunPower Panels 0.9 30,000 $ 10,800,000 13% 92% B LG Solar Panels 0.8 12,000 $ 3,840,000 4% 97% C REC Solar 0.7 10,000 $ 2,800,000 3% 100% C TOTAL 252,000 $ 85,440,000 100% According to the ABC methodology, 80% of the total disbursements of the company in solar panels has been for the Hanwha Q cells PV panels, which means that this group is considered as A products in terms of importance for the company. In this case, PV panels purchased from SunPower Panels will represent family B, and LG Solar Panels and REC solar will represent family C, which are essentially the least important category of products for the company in terms of payout. Taking into consideration this analysis, the 1% reduction in Lead Time will be applied to the Q cells to simplify the problem and make an impact on the core part of the business. Once this point is clarified, the next step will be to introduce the different strategies on which Supply Chain Management must be focused. These key topics are the following, and along the chapter we will review some of them: • Network planning • Inventory Management • Supply Contracts • Purchasing & Production sourcing • Distribution strategies • Supply Chain Integration and Strategic Partnering • Outsourcing and Offshoring Strategies 52 4.1.1 Network planning As was stated at the beginning of chapter 3, the physical supply chain consists of suppliers, plants, warehouses, distribution centers, and retail outlets as well as raw materials, and finished products that flow between the facilities. Network planning refers to the process by which the firm or business structures and manages its supply chain. This strategy essentially aims to help the company by: - Finding the right balance between inventory, transportation, and manufacturing or distribution costs. - Matching supply and demand under uncertainty by positioning and managing inventory effectively. - Utilizing resources effectively by sourcing products from the most appropriate manufacturing facility. The first step within a network planning process is to gather data regarding the actual state of the company. A typical network configuration problem involves large amounts of data, including information on: - Locations of customers, retailers, existing warehouses and distribution centers, manufacturing facilities, and suppliers. - All products, including volumes, and special transport modes (e.g., refrigerated). 3. - Annual demand for each product by customer location. After collecting the necessary data, the next step is to leverage this information to make an initial assessment of the company's status, focusing on economic expenditures, transportation time, and other relevant factors. Once this assessment is complete, the objective is to identify potential improvements for the existing system by suggesting alternative network configurations, and considering additions or reductions in functions, warehouses, offices, and other relevant components. Lastly, it is crucial to evaluate whether implementing these changes will provide measurable advantages in terms of cost-effectiveness and timeliness for the company. This evaluation will help determine the potential economic and time-related benefits that can be derived from the proposed modifications. 53 1) Network planning: Data collection Distribution of solar PV projects In our case, the first data we have regarding this problem is the distribution of solar PV installations that Continental Energy performs across the US, which can be observed in figure 11: Figure 11. Distribution of customer's worksite location. As can be seen in the map, the red zones imply a low to normal density of projects while the maroon color zones represent normal to high density of installations performed. Taking into consideration the information provided by the map, the biggest part of the projects take place in Ohio, Pennsylvania, Virginia, Indiana, Wisconsin, and northern part of Illinois. Distribution of headquarters and warehouse Continental Energy has 1 office and 1 warehouse for tool storage, both located in Oakbrook Terrace, Illinois, as can be seen in figure 12. 54 Figure 12. Location of current Continental Energy’s headquarters and warehouse. When Continental Energy was initially established, the majority of its projects and employees were concentrated in the northern part of Illinois. This geographical proximity led to the company establishing its headquarters in that location. Despite this, most of the company's projects are now situated in the eastern part of the United States, specifically in Ohio, Pennsylvania, West Virginia, as well as some in Illinois and Wisconsin. Freight rail map As has been seen previously, the gross of projects was in the eastern part of the country, specifically in Ohio, Pennsylvania, and West Virginia, but also some take place in Illinois and Wisconsin. The aim of this section is to determine: 1) The railroad map and miles that freight companies need to do to deliver their Solar PV panels to Continental Energy’s headquarters. 2) The road map that Continental Energy needs to carry the PV panels from their headquarters to the specific installations by truckload. It's important to note that Continental Energy's purchasing policies prevent them from commencing work on a project until they have received the panels for that specific project. As a result, they are unable to order the panels in advance. To overcome this 55 challenge, the company arranges for the panels to be delivered to their headquarters before forwarding them to the respective installation sites. For this analysis, we will focus on four different project locations: Wisconsin, Ohio, Pennsylvania, and West Virginia, as depicted in Figure 13 with designated spokes. Figure 13. Distribution of 4 main installations to compute freight costs. To calculate the total distances that freight railroad companies need to complete to deliver the ordered solar PV panels, we need to consider that these inventories arrive from the port of Newark-Elizabeth Marine Terminal in New Jersey which is one of the busiest ports for imports and a significant entry point for various goods, including solar PV panels. The Port of Newark is located near the metropolitan area of New York City and serves as a major hub for international trade, and is marked with an orange filled-shape in figure 13. 56 Figure 14. Newark Elizabeth Port in New Jersey. (Source:AllCityAerial.com). It has extensive container terminal facilities and is well-connected to transportation networks, making it a preferred port for importing goods into the East Coast region for inventories coming from Semiconductor manufacturing countries like Taiwan or China. This port can be identified within the map of figure 13 as an orange-filled shape. The overall distance between Continental Energy’s Headquarters and the Newark Elizabeth Port can be observed in table 4. Table 4. Distances between Port and Headquarters. Origin Point Ending Point Total distance CSX [miles] Total distance NS [miles] Average total distance [miles] Newark-Elizabeth Terminal Oakbrook Terrace 918 930 924 Even though 26 distances depend on the railway company that Continental Energy would pick for their PV panels orders, we can see there are similar and that’s the reason why it has been decided to consider from now on the average distance of both companies. 26 Aberdeen Carolina & Western Railway Company. Distances have been calculated with this software. Retrieved from: Freight Rail Map of Class I Carriers in North America - ACW Railway Company 57 Figure 15. Railroad map for CSX Intermodal. Figure 16. Railroad map for Norfolk Southern. On the other hand, once the PV panels need to be sent from the headquarters to the specific location where they will be installed, the most common practice for companies in the solar industry like Continental Energy is road transportation. In the table below appears the total road distance between the headquarters and the 4 installation projects: 64 Table 10. Total monthly expenses for PV transportation with new system. PV panels' transportation mode Origin Point Ending point Expenditure Percentage of expenditure Railcar New Jersey Port Headquarters $ 12,612.60 24.6% New Jersey Port Warehouse $ 25,184.25 49.2% Full Truckload Headquarters Customer's installation $ 1,748.11 3.4% Warehouse Customer's installation $ 8,044.40 15.7% Warehouse leasing - - $ 3,587.00 7.0% TOTAL $ 51,176.36 100.0% By comparing the expense structures of the existing network system with the proposed alternatives, it has been determined that significant cost savings can be achieved. The potential savings amount to approximately $26,702.35 per month, which represents a total of 34.28% reduction in monthly expenses for PV transportation, as shown in table 11: Table 11. Comparison between monthly expenses of new and existing network. Network distribution PV panels' transportation mode Itemized monthly expenses [$/month] Total monthly expenses [$/month] Existing system Railcar $ 50,450.40 $ 77,878.71 Full Truckload $ 27,428.31 New system Railcar $ 37,796.85 $ 51,176.36 Full Truckload $ 9,792.51 Warehouse $ 3,587.00 65 Finally, it is crucial to highlight that the implementation of the new network system will not only help achieve the economic objectives of the project but also address the timely aspect of the supply chain. One of the project's goals was to reduce overall lead time by 1%. Although a 1% reduction may seem minor, it holds significant importance across industries. For longer lead times spanning months, a 1% improvement can translate into several days of saved time. Table 12 provides a visual representation of the mileage and time savings resulting from the implementation of the new system, showcasing the tangible benefits for the company: Table 12. Lead Time savings in Miles and Days. PV panels' transportation mode Network Distribution Average Lead Time for all installations [Miles] Savings in average Lead Time [Miles] Average speed [Miles/hour] Savings in average Lead Time [Days] Railcar Existing system 924 243 30 1.01 New system 681 Full Truckload Existing system 443 285 55 0.65 New system 158 TOTAL 528 1.66 As is reflected in table 12, a total of 1.66 days is saved per order. If we compute this data with the Overall Lead Time (that includes an estimated time for the order to travelling across the ocean coming from an Asian supplier) which is estimated to be 90 days, and the US territory Lead Time (which basically refers to the time that the order takes to get to customer’s installation once they are in the US territory) we obtain the following percentages of improvement: Table 13. Lead Time improvement. Improvements on Lead Time Lead Time Savings [Days] Current Lead Time [Days] Percentage of improvement [%] US territory Lead Time 1.66 4.86 34.17% Overall Lead Time 1.66 90.00 1.84% According to the table, the analysis reveals a significant improvement in the overall lead time, with a reduction of 1.84%. This reduction signifies a substantial enhancement in the efficiency and timeliness of the supply chain operations for Continental Energy. Additionally, the 66 data shows an impressive reduction of 34.17% in lead time across the US territory, further highlighting the impactful nature of the implemented improvements. In conclusion, the implementation of a new warehouse in the Eastern zone, along with the proposed measures, will result in improved customer service, faster assessments, reduced transportation distances, and more competitive prices. These changes will enhance the overall efficiency and effectiveness of the supply chain, benefiting both the company and its customers. 4.1.2 Inventory Management Inventory management techniques are an integral part of supply chain management, playing a critical role in ensuring the efficient and effective flow of goods throughout the entire supply chain network. These techniques are vital for achieving several key objectives that contribute to the overall success of the organization. One of the primary goals of inventory management is to meet customer demand. By carefully managing inventory levels, companies can ensure that products are available when customers need them. This helps to avoid stockouts and backorders, which can lead to customer dissatisfaction and lost sales. By maintaining optimal inventory levels, companies can strike a balance between meeting customer demand and minimizing holding costs. Effective inventory management also helps to balance supply and demand fluctuations. By closely monitoring market trends, customer buying patterns, and demand forecasts, companies can adjust their inventory levels and production schedules accordingly. This ensures that they have the right amount of inventory at the right time, avoiding excessive inventory carrying costs or shortages. Reducing lead times is another critical aspect of supply chain management. By strategically positioning inventory at key locations along the supply chain, companies can minimize the time it takes to deliver products to customers. This leads to faster order fulfillment, shorter delivery times, and improved customer responsiveness. This is what was specifically covered in the first potential solution previously provided in this chapter. Cost optimization is an essential consideration in inventory management. Excess inventory levels can result in increased holding costs, such as warehousing, insurance, and obsolescence costs. On the other hand, inadequate inventory levels can lead to stockouts and associated costs, 67 such as lost sales and expedited shipping charges. Effective inventory management ensures that inventory levels are optimized to strike a balance between holding costs and stockout risks. The idea of this section is to provide Continental Energy with improvements from another point of view slightly different to Network Distribution. Specifically, this section will focus on Inventory Management tools and formulas to get the optimal number of PV panels’ safety stock, quantity order and reorder point that the company must meet to work under reliable conditions to avoid stockouts, excess of inventory and meet customer’s demand. There are two main models that most industries use to order from their providers depending on the specific conditions and needs of the company: • Continuous review policy: inventory is reviewed continuously, and an order is placed when the inventory reaches a particular level, or reorder point. This type of policy is most appropriate when inventory can be continuously reviewed—for example, when computerized inventory systems are used. • Periodic review policy: in which the inventory level is reviewed at regular intervals and an appropriate quantity is ordered after each review. This type of policy is most appropriate for systems in which it is impossible or inconvenient to frequently review inventory and place orders if necessary. For the current case, continuous review seems to be the most appropriate model for the company because of the following reasons: • Demand Variability: In the solar electric industry, demand for PV panels and related products can be highly variable due to factors such as seasonality, project timelines, and market trends. The continuous review model is well-suited to handle such variability as it continuously monitors inventory levels and triggers reorder points based on real-time demand data. • Real-Time Visibility: With the continuous review model, inventory levels are constantly monitored, allowing for real-time visibility into stock levels. This helps ensure that inventory levels are always aligned with demand, minimizing the risk of stockouts or excess inventory. • Lead Time Considerations: The continuous review model considers lead times, which is crucial in the solar electric supply chain where delivery times for PV 68 panels and related components can vary. By factoring in lead times, the model can calculate the reorder point to ensure that inventory is replenished in a timely manner to meet customer demand. Before starting with this model, some assumptions need to be done: • Daily demand is random and follows a normal distribution. In other words, we assume that the probabilistic forecast of daily demand follows a bell-shaped curve. This demand would be described by its average and standard deviation values. • Every time the distributor places an order from the manufacturer, the distributor pays a fixed cost, K, plus an amount proportional to the quantity ordered. • Inventory holding cost is charged per item per unit time. • Inventory level is continuously reviewed, and if an order is placed, the order arrives after the appropriate lead time. • If a customer order arrives when there is no inventory on hand to fill the order (for example when the distributor is stocked out), the order is lost. • The distributor specifies a required service level. The service level is the probability of not stocking out during lead time. For example, the distributor might want to ensure that the proportion of lead times in which demand is met out of stock is 98 percent. Thus, the required service level would be 98 percent in this case. To characterize the inventory policy that the distributor should use, we need the following information: • AVG = Average daily demand faced by the distributor • STD = Standard deviation of daily demand faced by the distributor • L = Replenishment lead time from the supplier to the distributor in days • h = Cost of holding one unit of the product for one day at the distributor • α = service level. This implies that the probability of stocking out is 1 - α For the continuous review model, it is frequently used what is known as (Q, R) policy, which basically describes that whenever inventory level falls to a reorder level R, an order for Q units needs to be placed. The purpose of this model is to determine whether the value of these two parameters is, in addition to other relevant values, such as the safety stock level and the average inventory level. 69 Before starting to compute these parameters, it is necessary to assign values to each of the variables mentioned above: • AVG = 556 panels/day (calculated from the 16,666 panels/month). • STD = 50 panels/day. It is a common standard deviation that considers that around 68% portion of the data will fall within the range of 506 to 606 panels/day. This rule, known as the 68-95-99 rule, states that 68% of the population is within 1 standard deviation of the mean. • L = 90 days. For the most typical PV panel that the company orders, the average supplier lead time is 90 days. • h = 0.15$/panel x day. The cost of holding one unit of the product for one day at the distributor must include the state, property taxes for holding that product, the maintenance costs, obsolescence costs, and opportunity costs. This cost has been calculated as follows: Table 14. Calculation of holding costs. Type of cost Concept Daily cost per panel [$/panel x day] State taxes, property taxes and insurance 2% of PV panel value 0.02 Maintenance costs 20$/PV panel 0.05 Obsolescence costs 30 years of lifespan, linear amortization over PV panel value 0.03 Opportunity costs 5% of PV panel value 0.05 TOTAL 0.15 • α = 0.95. With this value of service level, we would assume that 95% of orders are delivered on time. Once all the data has been gathered, the main parameters can be calculated: 70 Safety stock Safety stock level aims to be essential for any distribution or manufacturing company, as it provides a clear value for inventory that must never be trespassed. According to the continuous review policy, safety stock level can be calculated as follows: 𝑆𝑎𝑓𝑒𝑡𝑦 𝑠𝑡𝑜𝑐𝑘=𝑧 × 𝑆𝑇𝐷×√𝐿 Equation 8. Formula for computing Safety stock. The parameter Z is related to the service level that was mentioned before. According to table 13, a service level of 95% corresponds to a z equal to 1.65. Figure 19. Relation between parameter Z and service level. Taking into consideration this, we can compute the total value for the safety stock level: 𝑆𝑎𝑓𝑒𝑡𝑦 𝑠𝑡𝑜𝑐𝑘=1.65×50 𝑝𝑎𝑛𝑒𝑙𝑠 × √90 𝑑𝑎𝑦𝑠=783 𝑝𝑎𝑛𝑒𝑙𝑠 Equation 9. Calculation of Safety stock. Reorder level – R The reorder level R is the quantity of inventory that indicates when a new order needs to be done. It is calculated as a combination of the safety stock plus the average demand during the lead time: 𝑅=𝑆𝑎𝑓𝑒𝑡𝑦 𝑠𝑡𝑜𝑐𝑘+ 𝐿× 𝐴𝑉𝐺 Equation 10. Formula for computing Reorder Level. Computing the safety stock value and the suppliers Lead time with the average demand faced by Continental Energy we obtain the following: 𝑅=783 𝑝𝑎𝑛𝑒𝑙𝑠 + 90 𝑑𝑎𝑦𝑠 × 556𝑝𝑎𝑛𝑒𝑙𝑠 𝑑𝑎𝑦 =50,823 𝑝𝑎𝑛𝑒𝑙𝑠 Equation 11. Calculation of Reorder Level. Order size – Q After calculating the reorder level R, the next step is to compute the size of the order that will be done (Q): 𝑄=√2×𝑘×𝐴𝑉𝐺 ℎ 71 Equation 12. Formula for computing order size Q. In this scenario, the variable "k" represents the fixed cost that Continental Energy incurs with each order placement. Based on the information provided in the Network Planning improvement section, a significant portion of the fixed costs associated with ordering is attributed to railroad transportation. To simplify the calculation of these costs, we will assume that 20% of the total railroad transportation costs can be allocated as fixed costs, while the remaining 80% is variable and dependent on the quantity of panels ordered. Given that the overall railroad transportation costs were $50,450 per month, it implies that $10,090 would be designated as fixed costs. Considering that Continental Energy typically places between 10 and 12 orders per month, we can derive a general formula to estimate the fixed costs per order: 𝑘=Monthly fixed costs 𝑀𝑜𝑛𝑡ℎ𝑙𝑦 𝑜𝑟𝑑𝑒𝑟𝑠 =$50,450.40/𝑚𝑜𝑛𝑡ℎ 11 𝑜𝑟𝑑𝑒𝑟𝑠/𝑚𝑜𝑛𝑡ℎ=4,587$/𝑜𝑟𝑑𝑒𝑟 Equation 13. Formula for computing parameter k. With the value of k is now possible to calculate the value of Q, which will provide us with the optimal number of panels that Continental Energy should use when trespassing level R. 𝑄=√2×4,587 $ 𝑜𝑟𝑑𝑒𝑟×556 𝑝𝑎𝑛𝑒𝑙𝑠/𝑑𝑎𝑦 0.15 $/𝑝𝑎𝑛𝑒𝑙 × 𝑑𝑎𝑦 =5,832 𝑝𝑎𝑛𝑒𝑙𝑠/𝑜𝑟𝑑𝑒𝑟 Equation 14. Calculation of order size Q. Average inventory level To compute the last parameter of our interest we just need to combine the values of the safety stock plus half the size of the optimized order: 𝐴𝑣𝑔 𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑙𝑒𝑣𝑒𝑙=𝑄2+ 𝑆𝑎𝑓𝑒𝑡𝑦 𝑠𝑡𝑜𝑐𝑘 Equation 15. Formula for computing Average inventory level. 𝐴𝑣𝑔 𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑙𝑒𝑣𝑒𝑙=5,832 𝑝𝑎𝑛𝑒𝑙𝑠 2+783 𝑝𝑎𝑛𝑒𝑙𝑠=3,699 𝑝𝑎𝑛𝑒𝑙𝑠 72 Equation 16. Calculation of Average inventory level. In conclusion, through the application of continuous inventory review principles, we have successfully computed several key values that can enhance the existing system. The determination of the reorder level, denoted as "R," enables Continental Energy to establish a threshold at which replenishment is triggered, ensuring a continuous supply of panels. Additionally, the optimal ordering quantity, referred to as "Q," has been calculated, providing guidance on the ideal number of units to order each time to balance inventory costs and meet customer demand. Furthermore, by considering factors such as lead time, demand variability, and desired service level, we have derived the average inventory level and safety stock. These metrics aid in maintaining adequate stock levels to fulfill customer orders while mitigating the risk of stockouts. Overall, these computed values contribute to the improvement of the existing system by promoting efficient inventory management practices, ensuring uninterrupted operations, and optimizing the balance between inventory costs and customer service levels. A summary of the values computed can be observed in table 13: Table 15. Calculation of Inventory Management parameters. Parameter Value Units Safety Stock 783 panels R - Reorder Level 50,823 panels Q - Order Quantity 5,832 panels/order Average Inventory Level 3,699 panels 4.1.3 Supply Contracts To conclude the solutions chapter aimed at addressing disruptions in Continental Energy's PV panels supply chain, we turn our attention to a different perspective: supply contracts. While we have discussed various solutions related to network planning and inventory management, it is important to consider the role of supply contracts in ensuring a robust and reliable supply chain. 73 Supply contracts play a crucial role in establishing clear expectations, responsibilities, and commitments between Continental Energy and its suppliers. These contracts can include provisions for quality standards, delivery schedules, pricing agreements, and contingency plans for unforeseen events. By establishing strong and mutually beneficial supply contracts, Continental Energy can enhance its supply chain resilience and mitigate potential disruptions. Key aspects to consider in supply contracts include setting clear performance indicators, such as on-time delivery rates, product quality standards, and response times for resolving issues. In addition, contingency provisions can be included to address scenarios such as supplier failures, natural disasters, or geopolitical disruptions. These provisions can outline alternative sourcing options, stockpiling strategies, or collaboration with backup suppliers. Furthermore, supply contracts should foster open communication channels and collaboration between Continental Energy and its suppliers. Regular performance reviews, joint forecasting exercises, and shared risk assessment can help build strong relationships and enable proactive problem-solving. These collaborative efforts contribute to a more responsive and agile supply chain, allowing both parties to address potential disruptions swiftly and effectively. Typically, a buying-selling process requires a two-stage sequential supply chain. On the one side, there should be the buyer’s activities: • Generating a forecast • Determining how many units to order from a supplier. • Placing an order to the supplier to optimize buyer’s own profit. • Purchase based on forecast of customer demand. On the other side there is the seller’s activities: • Reacting to the order placed by the buyer. Once these stages have been completed, the process will be finished. This is what is called sequential planning (or non-collaborative) supply chain. Some of the main characteristics of this kind of sourcing strategies include: • The buyer assumes all the financial risk of having more inventory than sales. • The buyer limits his order quantity because of the huge financial risk. Since the buyer limits his order quantity, there is a significant increase in the likelihood of running out of stock. 80 specified at the beginning of the project, and amounted a total of $10,272 (equivalent to 540 Credit Hours) plus the honorary of my work. The initial budget included the assessment, review and experience from my advisor and university facilities. The part of the honorary has been calculated as 540 hours of engineering work per an average price per hour for engineers with master’s level of education ($43/hour), resulting in a total price of $23,220. Adding both terms we obtain a total investment cost of $33,492. Additionally, we would need to consider the horizon of the project and the financial benefits, which has been determined to be 2 months due to the due to the ease of applying the improvements. Accordingly, the financial benefits for 2 months would be the multiplication of $26,702.35 per 2, resulting in $53,404.7. Computing both terms, we can obtain the total ROI, generally expressed in percentage: 𝑅𝑂𝐼=$53,404.7−$33,492 $33,492 ×100%=59.46% Equation 18. Calculation of Return On Investment. Common values for ROI’s engineering projects could be between 20-40%, which means that this project provides a high ROI percentage if compared to standard projects. A high value of ROI typically indicates a more favorable investment performance, as it suggests that the returns generated significantly exceed the initial investment cost. A high ROI implies that the investment has been successful in generating substantial profits relative to the amount invested. 5.2 Environmental Impact In this section, we delve into the environmental impact assessment of Continental Energy's solar electric supply chain project using the MET (Materials, Energy, Toxicity) matrix methodology. As sustainability becomes an increasingly vital consideration, it is crucial to understand the ecological consequences of our actions. The MET matrix provides a systematic framework for evaluating the project's environmental footprint across key dimensions, namely materials, energy, and toxicity. By analyzing the materials used, energy consumption, and potential toxic elements within the supply chain, we can gain valuable insights into the project's environmental impact. This methodology enables us to identify areas for improvement, make informed decisions, and promote responsible practices that align with Continental Energy's commitment to sustainability. 81 The MET matrix is a qualitative tool that takes the form of a 3x3 matrix with descriptive text in each of its cells. One dimension of the matrix is composed of a qualitative input-output model that examines environmental concerns related to the product's materials use, energy use, and toxicity. The other dimension looks at the life cycle of the product through its production, use, and disposal phase. A possible assessment of the impact of the improvements including network planning, inventory management, and supply contracts on the MET (Materials, Energy, Toxicity) matrix for Continental Energy's solar electric supply chain project: Materials • Network Planning: The optimization of transportation routes and consolidation strategies have reduced the distance traveled and minimized the use of packaging materials. This has led to a reduction in resource consumption and waste generation, positively impacting the environmental sustainability of the materials used in the supply chain. • Inventory Management: Improved inventory management practices, such as reducing excess inventory levels and implementing just-in-time principles, have reduced the overall material requirements and waste associated with inventory holding. This has contributed to resource conservation and minimized the environmental impact related to materials. Energy • Network Planning: By optimizing transportation routes, the improvements in network planning have reduced the overall energy consumption associated with the movement of PV panels. The consolidation strategies and efficient load planning have led to fuel savings and a decreased carbon footprint, contributing to energy conservation. • Supply Contracts: The implementation of supply contracts, such as quantity-flexible contracts and revenue-sharing contracts, would enable Continental Energy to achieve better coordination with suppliers. This will result in reduced lead times and transportation distances, leading to energy savings and a more efficient use of resources. Toxicity • Network Planning: The optimization of transportation routes and consolidation strategies have minimized the need for additional handling and intermediate storage, reducing the risk of mishandling or accidental spills of potentially toxic substances. 82 • Supply Contracts: The use of supply contracts that prioritize environmentally friendly practices has ensured the selection of suppliers that adhere to strict regulations and guidelines regarding the use of toxic substances. This has helped minimize the potential environmental and health risks associated with hazardous materials. Evaluation The improvements in network planning, inventory management, and supply contracts have had a positive impact on the MET matrix. They have contributed to reduced resource consumption, minimized waste generation, and enhanced energy efficiency throughout the supply chain. By optimizing transportation routes, reducing excess inventory, and promoting environmentally friendly practices through supply contracts, Continental Energy would successfully improve the sustainability of their materials, reduced energy consumption, and minimized potential toxic risks. 83 CHAPTER 6 CONCLUSIONS The project has yielded significant and tangible results in terms of cost reduction and lead time improvement within the solar electric supply chain of Continental Energy. By analyzing the data and implementing targeted improvements, the following conclusions can be drawn: Cost reduction The project has successfully achieved the objective of reducing costs by at least 20%. Through the implementation of network planning improvements, such as optimized transportation routes and strategic warehouse placements, a total of 34.28% costs savings have been achieved. Additionally, the enhancements in inventory management and supply contracts have contributed to cost reduction by improving efficiency and minimizing unnecessary expenses. The achieved cost reduction not only strengthens the financial position of Continental Energy but also enhances its competitiveness in the market. Lead Time Improvement The project has successfully met the objective of reducing lead time by at least 1%. By implementing inventory optimization techniques, ensuring timely availability of PV panels, and establishing efficient supply contracts, the lead time from order placement to delivery has been significantly reduced. With the network planning implementation, an improvement of 1.84% of Lead Time reduction can be successfully achieved. This improvement would positively impact customer satisfaction, allowing Continental Energy to deliver projects more efficiently and meet client expectations in a timely manner. Enhanced Financial Performance The cost reduction achieved through improved network planning, inventory management, and supply contracts has had a direct impact on the financial performance of Continental Energy. The savings generated from streamlined logistics operations, reduced transportation distances, and optimized inventory levels have resulted in improved profitability. These cost savings can be reinvested in further business growth, research and development, and other strategic initiatives. Competitive Advantage 84 The successful implementation of the project's objectives has positioned Continental Energy with a competitive advantage in the solar electric supply chain industry. The company's ability to offer cost-effective solutions, shorter lead times, and improved customer service gives it an edge over competitors. The project's outcomes have solidified Continental Energy's reputation as an efficient and reliable provider of solar PV panels, attracting more customers and strengthening its market position. In conclusion, the project's efforts to reduce costs by at least 20% and improve lead time by at least 1% have been highly successful. The achieved cost savings, improved efficiency, and enhanced customer satisfaction highlight the project's positive impact on Continental Energy's economic performance. From my point of view, by embracing these improvements, the company is well-positioned for continued growth and success in the dynamic solar electric supply chain industry. Personal thoughts Throughout this project, I have gained valuable insights and reflections. Here are some key points that capture my personal thoughts: • Collaboration: Working closely with the team at Continental Energy and other stakeholders highlighted the power of collaboration. By leveraging diverse perspectives and expertise, we were able to achieve impactful solutions. • Continuous Improvement: The project emphasized the importance of continuously striving for improvement. By analyzing data, identifying areas for enhancement, and implementing innovative solutions, Continental Energy achieved significant cost savings and operational efficiency. • Environmental Responsibility: The project's focus on assessing the environmental impact reinforced the importance of sustainable practices in the renewable energy sector. By considering factors like emissions and lifecycle impact, we contributed to a greener future. • Business Impact: The project demonstrated that strategic improvements in network planning, inventory management, and supply contracts can have a profound impact on business success. 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