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 which is now being changed to standardization. This change can be best illustrated by comparison of Figures 1.1 and 1.2 in Appendix 1, wherein the possible corporate structures may tend to three different values, i.e. cost, differentiation and responsiveness; Spartan strategy has shifted its focus from a differentiation and responsive model to a cost effective model.
• Job shop method of production to Hybrid method.
The new corporate strategy implies re-engineering from a job shop method of production to a hybrid method of production. The former involved manufacturing operations with several departments, each of which produced particular components whereas the latter being a flow operation where multiple stations can work simultaneously. This will mainly allow Spartan to increase volume of production, reduce lead time and it will further lead in cutting down the carrying cost of inventory, even though the inventory will be high.
• Change in Corporate Culture.
The new strategy will affect the corporate structure of the company. Earlier the work was based on the specific requirements of the client and it was more of research based but now the focus on research will be less and it will be more on general requirements. Therefore the type of work would shift.
The present organizational chart of the SC Department in the company...