partan Heat Exchangers Inc.

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 of new competition from European and Korean companies they have changed their corporate policy, which emphasize on reducing the variety and standardizing the product. The new business policy also aims at reducing the current lead time from 14 weeks to 6 weeks.
Problem Statement
The Materials Department headed by Rick Coyne has to take many initiatives internally to incorporate the various implications of the new strategy, and submit his report to his boss Max Brisco with the changes suggested by him within a week.
The major challenges that Rick faces include:
• Change from responsive to anticipatory model of production.
• Increase inventory turns from present 4 times to 20 times.
• Eliminate material shortages and stock outs.
• Reduce cost of purchased goods by 10%.
• Reduce custom lead time from 14 weeks to 6 weeks.
• Eliminate discrepancies with inventory records.
• Keep-up with the increased competition in the industry.
Analysis of key issues & options
• Interpretation of new corporate strategy.
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...