Spartan Heat Exchangers Inc.
Current State
Spartan Heat Exchangers Inc. is a leading designer and manufacturer of specialized industrial heat transfer equipment for more than 10 years. The company’s primary products are transformer coolers, hydro generator coolers, air-cooled heat exchangers and transformer oil coolers. Their USP – Fin tube type heat exchangers and long lasting products.
They are into highly customized heat equipments & because of new competition from European & Korean companies they have changed their corporate policy, which emphasize on reducing the product variety & standardized the product. The new business policy also states of reducing the current lead time from 14 weeks to 6 weeks.
Problem Statement
The Materials Department headed by Rick Coyne has to take a lot of initiatives internally to incorporate various implications of the new strategy, and submit his report to his boss Max Brisco of the changes suggested by him within a week.
His major challenges are:
• Change from responsive to anticipatory model.
• Keep-up with the increased competition in the industry.
• Inventory turns from present 4 times to 20 times.
• Eliminate material shortages & stock outs.
• Reduce cost of Purchase goods by 10%.
• Reduction in the custom lead time from 14 weeks to 6 weeks.
Analysis of Key issues & options:
• Interpretation of new corporate strategy. (ok, might need some rephrasing of words) In our view the key issue is to find out how to adapt the supply chain strategy from a responsive model to an anticipatory model.
The previous corporate strategy was based on customization of each of their products which is now being changed to standardization. This change can be best illustrated by comparison of figures 1.1 and 1.2 in Appendix 1, wherein the possible corporate structures may tend to three different values, i.e. cost, differentiation and responsiveness; Spartan strategy has shifted from a focus in differentiation and responsiveness to a cost and
Spartan Heat Exchangers Inc. is a leading designer and manufacturer of specialized industrial heat transfer equipment for more than 10 years. The company’s primary products are transformer coolers, hydro generator coolers, air-cooled heat exchangers and transformer oil coolers. Their USP – Fin tube type heat exchangers and long lasting products.
They are into highly customized heat equipments & because of new competition from European & Korean companies they have changed their corporate policy, which emphasize on reducing the product variety & standardized the product. The new business policy also states of reducing the current lead time from 14 weeks to 6 weeks.
Problem Statement
The Materials Department headed by Rick Coyne has to take a lot of initiatives internally to incorporate various implications of the new strategy, and submit his report to his boss Max Brisco of the changes suggested by him within a week.
His major challenges are:
• Change from responsive to anticipatory model.
• Keep-up with the increased competition in the industry.
• Inventory turns from present 4 times to 20 times.
• Eliminate material shortages & stock outs.
• Reduce cost of Purchase goods by 10%.
• Reduction in the custom lead time from 14 weeks to 6 weeks.
Analysis of Key issues & options:
• Interpretation of new corporate strategy. (ok, might need some rephrasing of words) In our view the key issue is to find out how to adapt the supply chain strategy from a responsive model to an anticipatory model.
The previous corporate strategy was based on customization of each of their products which is now being changed to standardization. This change can be best illustrated by comparison of figures 1.1 and 1.2 in Appendix 1, wherein the possible corporate structures may tend to three different values, i.e. cost, differentiation and responsiveness; Spartan strategy has shifted from a focus in differentiation and responsiveness to a cost and