Assignment:
PLEASE READ THE BELOW THREAD. AND Engage In A Substantive Discussion On The Below Discussion/Thread
Submit Reply To 300 to 450 Words . Make Sure That You Are Adding New And Relevant Information With Each Reply
The Case Study H.C. Starck Inc. case study is in reference to a company who started in vacuum technology. A MIT graduate named Richard S. Morse founded Starck Inc. Morse who was involved in the national research corporation in 1940. H.C. Starck evolved into majoring in technology of metals such as tungsten, molybdenum, tantalum, niobium, and rhenium. They also manufacture high performance ceramics and thermal spray powders.
Problem:
The problem faced with H.C. Starck Inc. was experiencing lead times of 8 to 14 weeks. This was slowing down time from when a customer orders to the time the product ships. This encountered was due to long manufacturing times. The implemented goal took place when they hired Tom Carroll a Fellow who attended MIT's Manufacturing program June 1, 1999. Carroll main goal was to reduce lead-time to 2-3 weeks, increase sales, and increase inventory. Tom focused on interviewing various leaders and associates throughout the company. This would enable him to implement a change in the flow of production. According to research, lead-time was first introduced in the 1980's. de Treville (2014 p.1) proposed a model that uses quantitative finance tools to optimize sourcing decisions in the face of evolutionary demand risk. The authors demonstrate that when the forecast evolves over time and demand volatility is high or stochastic, the marginal value of time is high and investment in lead-time reduction is warrant. Through this research, they were able to prove that if lead-time would increase it would lead to increase in left over or residual inventory eventually causing loss in revenues de Treville (2014). Carroll intuition to begin working on H.C. Starck Inc. lead-time would prove beneficial.
Focus:
Carroll examined all the systems and decided it would be best to implement an Enterprise Resource Planning System (SAP scheduling system) to assist in their current planning and scheduling. According to Herrmann, F. (2016) "capacity considerations in master production scheduling and material requirements planning cause incorrect estimations of lead times, out-of-stock and tardiness, respectively, can be substantially reduced by scheduling". Which, if H.C. Starck Inc. could implement a SAP it may aid in reducing lead times to help in improving inventory management and reduce unnecessary inventory. Carrol goal was if he could decrease lead-time, he would eventually increase sales.
Solutions:
Carroll also wanted to implement a change to their inventory, which would aid to produce an increase in their market aid in reducing or eliminating their competition and examine the need to purchase or hold scrap metal. The transportation aspect would need further assessment. This would aid in the adoption of SAP. Orders would have clarity and aid in marketing the company for the public to be aware they were responsive, reliable, and efficient, and effective. With these new processes in place, the company would have to keep customers informed. Carroll would use the data to examine past orders and purchases to allow for proper forecasting.
Case Questions:
One factor that could have led to lead-time delays were the initiation process of the products not executed in an efficient amount of time. H.C. Starck Inc. was producing tantalum powders, nonetheless, once the customer was ordering the product it was taking 8-14 weeks to ship and delivered. Many factors can contribute to prolonged lead-times. The delays may be attributed to the process of how the tantalum powered needs to be manufactured to how long it takes to be produced. The right amount of time needs to be factored into the equation. Time should start from the time of design, materials, equipment, labor, production, manufacturing, delays, implementations, transportation, and delivery.
H.C. Starck Inc. could reduce or affect the lead-time by analyzing the required materials and equipment in their warehouse. After assessing current inventory, they could arrange, organize, and assign them to proper or most effective warehouse locations. If they analyze and compare various suppliers, they may be able to access better rates on purchases of raw materials, equipment, and labor. Assessing current transportation routes, miles, and cost could be cost effective as well. Working with contractors to decrease current cost. Investing in technology to aid in sorting and monitoring all their current supplies, shipments, labor, overhead cost, and productions. Providing education to leads and managers on the importance of using tracking tools and analyzing their data to aid in forecasting.
The cost of reducing lead-times may be associated with decreased in suppliers to manufacture their raw materials and equipment suppliers. If they decrease cost, they can save on implementation of new warehouses, machines, and new technology systems.
The benefits from reducing lead times would increase sales. Decrease in delivery times, which would, led to customer satisfaction. If they have, satisfied customers this could lead to positive publicity, which could increase revenues and sales.
Conclusion:
In order for H.C. Starck Inc. to decrease their lead-time, they need to implement various strategies. They would have to adapt to change in their current inventory management. Ensure that they have the proper transportation and competitive pricing available. Adopting of SAP system to aid in management and scheduling inventory. H.C. Starck Inc. should also introduce a new marketing implementation to aid in awareness of change of strategies to help in decreasing lead-times from 8-14 weeks decreased to 2-3 weeks.
References
de Treville, S., Bicer, I., Chavez-Demoulin, V., Hagspiel, V., Schürhoff, N., Tasserit, C., & Wager, S. (2014). Valuing lead time. Journal of Operations Management.
Herrmann, F. (2016). Using optimization models for scheduling in enterprise resource planning systems. .