Spartan Heat Exchangers.edited.docx - Case Study 2.1 u2013...

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Case Study # 2.1 – Spartan Heat Exchangers Inc. Business Strategy for the Materials Group Immediate Issue: Prepare a strategy for the materials group to support the new business strategy of the company. In order for Rick Coyne and his materials group to devise a successful business strategy, they must look at the entire operation as a whole. Identify the “corporate, business unit and functions” of the business and plan their processes to interline with these principles. With this in mind, the strategy Rick Coyne and his materials team should use to meet the new direction of the company is: 1) Do a full inventory audit of the existing materials in the store to understand what you currently have and update your database accordingly. 2) Implement a security structure within the store to prevent staff from taking materials without it being documented and processed through the database. 3) Review the material lists for the new standardized product lines. 4) Determine 2 or 3 of your best tier 1 and tier 2 vendors who can supply the materials needed. 5) Determine the quantity needed for manufacturing, considering the 20 times turn over rate desired, including safety stock. 6) Ensure overlap of delivery times to ensure there is no chance of stock-outs. 7) Negotiate rates and lead times with the best vendors as identified previously. Ensure they can meet the demand needed. By reducing the number of vendors and dealing with specifically your best few, you can increase your PO (Purchase Order) quantities. Increasing your purchase volume is a purchasing power which allows company leverage to negotiate better rates based on the concept of economies of scale. This means that Rick Coyne should have no problem reducing Spartan’s purchasing costs by 10%. 1 | P a g e
Basic Needs: As you can see from the above strategy plan, all of the below basic issues have been covered. 1 Congruency between corporate and functional strategies Our plan is congruent with the corporate and functional strategies as it meets all of the targets set out in the new corporate strategy.

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