Supply chain. Case: H. C. Starck, Inc.
Daisy Nguyen
Ma2n0217
A process - development company that focused on exploring vacuum
technology and entered tantalum industry I 1959. Until 1989, HCTS
acquires tantalum mill and entered metallurgical products market
Q1. Why lead times so long:
- All the production order stacked up in Jim’s desk, until it is time to
release it to the production floor. If it is not due to 8 weeks, Jim
might keep it for 4 weeks before releasing it, depending on the
loading in the shop at the time.
Per Jim I‘ve been here long enough and knows how long it will take.
He lose not have faith in SAP because he does not think the recipes
are right.
- The order cycle time takes 2-3 weeks and it takes 8-14 weeks for
order to be shipped.
-
Jobs are bypassed until the “problematic” order make it to the
“drumbeat list”

We have to wait for Production Order #1 to finish to get to Production
Order #2 to get to Production Order #3.
SAP was often ignored and a manual paper based process was used to
transmit the order from Sales to Operations.
First step to create SO had been implemented reducing to 1 business day
or less. Second step to create PO was taking 2 weeks. GI-GR small portion
of lead time (<25%)
The problem lay in SO to GI phase –all that time between when the sales
department entered order in SAP and when plant actually started
manufacturing
Q2. How might Starck reduce or affect the lead times?
- H.C Stark Newton was able to reduce waste , optimize productivity,
streamline process, improve efficiencies and reduce cost to become
more competitive and maintain its lead a global supplier of
technology metals
- Reducing lead times improve inventory management and can be
used to reduce inventory. Also with less lead time a sales increase is
to be expected
- Make full use of the new system SAP R/3
have engineers to solve equipment problems
- Have standard stocks between different sizes
- Implement SAP system for planning and scheduling
- Items that are in demand should be manufactured and by available
in stock
Q3. What are the costs from reducing the lead times? What are the
benefits from reducing the lead times?
Cost involved with lead time reduction:
• Ordering Costs
• Transport Costs
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•
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Inventory Costs
Stock-out Costs
Quality Costs
Labor Costs
Operating Costs
Lead time Reduction Benefits
 Lessen canceled orders
Customer Retention
 Reduce product Obsolescence
Decrease in processing &
waiting time
Increase customer satisfaction
 Improved overall quality & management
Quicker detection
of quality problems
Lower inventory cost
Improved forecasting Reduced safety stocks
Lower
inventory cost