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Case 2-1: Spartan Heat Exchangers Inc.
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IMMEDIATE ISSUE
Prepare strategy for the materials group to support the new business strategy of the company.
BASIC ISSUES
1. Congruency between corporate and functional strategies
2. Operations transformation
3. Supply chain management
4. Inventory management
5. Strategic planning
SUGGESTED STUDENT ASSIGNMENT FOR CASE REPORT
If you were in the position of Rick Coyne, what would be your response to Max Brisco’s request? What recommendations would you make and why? You may play the role of the protagonist or a consultant in your report.
GUIDANCE QUESTIONS – THESE QUESTIONS ARE SIMPLY TO PROVOKE THOUGHT, NOT TO BE ANSWERED IN A ROTE FASHION.
1. What are the implications for the change in corporate strategy on Spartan’s operations? How easy a task will it be to make this change?
2. How does a change from a job shop to a flow operation impact the requirements on the materials function and Spartan’s suppliers? What changes will have to be made?
3. Is it reasonable to expect an improvement inventory turns from four times to twenty times? How can this be accomplished?
4. Should Rick Coyne commit to a 10 percent reduction in prices from suppliers? Do you think this target is achievable? If so, how?
5. Can we cut lead times from 14 weeks to six weeks? What changes will have to be made to Spartan’s the supply chain to achieve this objective?
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