MBA 642- Dr. Lynn Fish
Assignment #2- H.C. Starck, Inc. Case
1. Why are the lead times so long? 2.5 points
There are many reasons to explain why the lead times at H.C. Starck, Inc. were so long. A variety of explanations can be made, in which all were mentioned by various members of the H.C. Starck, Inc. team or through inferences made by management.
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. Also, Lee Sallade, who was the director of Operations for H.C. Starck, Inc., ...view middle of the document...
The metallurgical products (MP) division of HCST was comprised of two basic functional areas, which included rolling and fabrication. Lead time could have been reduced in this specific area of the firm if the rolling and fabrication processes could occur in one area of the plant, as opposed to having them be performed as two separate entities. Also, as Arthur Bronstein mentioned, who was the Director of Metallurgical Products for HCST, “The average piece of tantalum going through the large rolling mill for breakdown rolling is 570 lbs., and it takes 55 minutes to process it. For finish rolling, the average piece is 450 lbs., and it takes two hours to complete. The changeover between breakdown and finish takes a full eight-hour shift.” Lead time could be significantly reduced if HCST was able to cut its breakdown rolling pieces in half, as well as the finish rolling pieces, because this would allow less time for changeover and more production to occur.
Finally, lead times took so long at HCST because of production variability, and the fact that the SAP scheduling utility was rarely, if ever used. The degree of customization that HCST needed to deal with when they handled customer orders varied from extremely customizable to extremely generic. In turn, the time that would need to be spent on the highly customizable products would result in longer lead times for the customers to handle. In addition to that, as Jim McMahon, Supervisor of Production Control mentioned in the case, most of the schedule misses and mistakes were due to equipment failures. In addition to raw material ordering, Jim needed to manually perform shop floor scheduling. Jim was confident in his production orders and felt that his experience would provide enough reasoning for excluding the usage of the SAP scheduling utility. In retrospect, the recipes that were being generated manually were a large problem, but Jim could not admit that the usage of the SAP utility may be more accurate than his manual expertise. Standard costs were calculated incorrectly, and for some products, these costs were lower than for the raw material used to make them (something which is logistically inaccurate and impossible). In order to combat this, the engineering department was asked to combat this, but was doing so at an extremely slow rate. Because of this, the engineering department was unable to focus on their main task at hand, which was to produce the tubing needed for customer orders, which would then result in elongated lead times.
2. How might Starck reduce or affect the lead times? 2.5 points
There are many different ways that Starck could reduce of affect the lead times they were faced with. To begin, Starck would need to drastically decrease the degree of customization they had previously allowed when customers were placing orders. Granted, some customization is needed in order to fulfill the needs of the customer, but there were no precedents set which would...