Aftermarket Vehicle Hybridization: Designing a Supply Network for a Startup Company
by
Marcus S. Causton
B.S. Chemical Engineering
Colorado School of Mines, 2000
and
Jianmin Wu
B.S. Chemical Engineering
Cornell University, 2009
Submitted to the Engineering Systems Division in Partial Fulfillment of the
Requirements for the Degree of
Master of Engineering in Logistics
at the
Massachusetts Institute of Technology
May 2010
© 2010 Marcus S. Causton and Jianmin Wu. All rights reserved.
The author hereby grants to MIT permission to reproduce and to distribute publicly paper and electronic copies of this document in whole or in part.
Signature of Author………………………………………………………………………………….
Master of Engineering in Logistics Program, Engineering Systems Division
May 2010
Certified by………………………………………………………………………………………….
Dr. Jarrod Goentzel
Executive Director, Masters of Engineering in Logistics Program
Thesis Supervisor
Accepted by…………………………………………………………………………………………
Prof. Yossi Sheffi
Professor, Engineering Systems Division
Professor, Civil and Environmental Engineering Department
Director, Center for Transportation and Logistics
Director, Engineering Systems Division
Aftermarket Vehicle Hybridization: Designing a Supply Network for a Startup Company
by
Marcus S. Causton and Jianmin Wu
Submitted to the Engineering Systems Division in partial fulfillment of the requirements for the degree of Master of Engineering in Logistics
at the Massachusetts Institute of Technology
Abstract
Our thesis introduces a supply chain framework catered for startup companies. Startup companies face unique circumstances such as constraints on financial and human resources, and greater uncertainty in demand. From our work with XL Hybrids, a startup company that hybridizes aftermarket vehicles, as well as interviews and literature review, we have attempted to distill supply chain strategies that can be applied to startup companies.
To plan XL Hybrids’ supply chain, we developed models for the following aspects of their supply chain: production scheduling, capacity planning, inventory policy, and component distribution. By running different demand and pricing scenarios, we gained an understanding of the impact of these variables on the four aspects of XL Hybrid’s supply chain. Based on the scenario analysis and supply chain framework that we developed, we recommend that XL Hybrids be conservative with capacity expansion while strategically sourcing key components after considering volume discounts and different distribution methods.
Thesis Supervisor: Dr. Jarrod Goentzel
Title: Executive Director, Masters of Engineering in Logistics Program