Group Case Study
Spartan Heat Exchangers Inc. Current State
Spartan Heat Exchangers Inc. has been 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 are Fin tube type heat exchangers and long lasting products.
“… A heat exchanger is a device that is used to transfer thermal energy (enthalpy) between two or more fluids, between a solid surface and a fluid, or between solid particulates and a fluid, at different temperatures and in thermal contact. …”
The company is into highly customized heat equipments. Presently, due to entry …show more content…
The company will benefit from having one person responsible for forecasting demand. Processes should be reviewed to ensure that the SC Department has sufficient access to information in order to achieve this task. Re-buying will also be of utmost importance now in order to ensure that there is always sufficient inventory to maintain production going.
• Raw materials procurement.
The customization strategy required the presence of many vendors and a high level of inventory in the warehouse.
On the contrast, the new corporate strategy reduces variety to 3-4 basic lines for each product category will require less variety of raw material but in higher quantity in respect of each variety, but with a lower inventory average level in comparison with the present situation. This will bring down administration cost, overhead expenses and ordering costs. It will also give the company a higher negotiation power for better overall conditions, including delivery time, transportation cost, price, quality and budget.
• Lead time reduction from 14 to 6 weeks for finished goods.
One of the strategy changes is to reduce the lead time from 14 to 6 weeks in order to keep up with the competition in the market. From SC this may be discussed with the vendors at the time of negotiation and