Lean supply chain, consolidation centers

This case describes the role of consolidation centers in the lean supply chain. The description here articulates the rules for designing a consolidation center, a supply chain middle man that makes the total chain more effective. Consolidation centers are playing an increased role in many supply chains, particularly as feeders to manufacturing operations that produce complex products with many components. Every supplier cannot or will not link its operations with its customers. The consolidation center enables this linkage — at least until better suppliers can be found. In some cases, consolidation centers are under the control of third-party logistics providers responsible for ordering material, its transportation, and its preparation for the manufacturing center. 

In general, adding a middleman between suppliers and users does not enhance a supply chain, and it is therefore surprising to find leading, lean carmakers doing it. They have many different motivations. A consolidation center can shield the factory from dealing with overseas suppliers with lead times in months. The consolidation center is then a domestic supplier, working with the plant as if it made its own parts on a day-to-day basis. 

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