Ms.Chanatip Dansirisanti
MA2N0204 陳美清
H.C. Starck, Inc.
1. What are the lead times so long?
To begin, H.C. Starck, Inc. experienced lead times that were longer than expected
because there was a belief that the manufacturing time was taking far too long,
although no hard data was provided to support this.
SAP was often ignored and a manual paper based process was used to transmit the
order from sales to operation. Lee Sallade focusing on it solely would be a
significant error in all aspects. He felt that in addition to controlling lead time that
overall cycle time needed to be accounted for, as well, which may have also led to
the lead times lasting for such an extended period of time. First step to create SO
had been implemented reducing to 1 business day or less. Second step to create
PO was still 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. Also, the fact
that the company had Ta reduction and powder manufacturing operations in Japan,
Thailand and Germany. However, the Newton, MA location in the United States
was the only plant that possessed the melting and mill capabilities needed in order
to fulfill customer orders. This meant that any orders that needed to be melted or
passed through the mills needed to be sent from the locations overseas to the
Newton, MA location, which in turn, would create bottlenecks for production and
longer lead times.
2. How might Starck reduce or affect the lead times?
Starck may implement SAP system for planning and scheduling. The products that
are in demand should be manufactured and available in stock. Starck should
predict an accurate future demand, therefore, company be able to hold
intermediate inventory. Pick stocking points based on risk pooling benefits, lead
time reduction, volume. Also, determine inventory requirements based on
inventory model such base stock. Order expedition should be exception then a
rule. Moreover, Starck should manage to eliminate delays of paper work. All in
all, company should cycle time for each process order.
3. What are the costs from reducing the lead times? What are the benefits from
reducing the lead times?
Reducing lead times improves inventory management; reduce inventory, better
planning, better customer service and in long term reducing lead-time is increased
sales. Moreover, it can create new accounts and new business as well as protect
current business from switching to substitutes or Chinese competitor.