Spartan Heat Exchangers Inc. Current State
Spartan Heat Exchangers Inc. has been a leading designer and manufacturer of specialized industrial heat transfer equipment for more than 10 years. The company’s primary products are transformer coolers, hydro generator coolers, air-cooled heat exchangers and transformer oil coolers. Their USP are Fin tube type heat exchangers and long lasting products.
“… A heat exchanger is a device that is used to transfer thermal energy (enthalpy) between two or more fluids, between a solid surface and a fluid, or between solid particulates and a fluid, at different temperatures and in thermal contact. …”
The company is into highly customized heat equipments. Presently, due to entry …show more content…
• Raw materials procurement.
The customization strategy required the presence of many vendors and a high level of inventory in the warehouse.
On the contrast, the new corporate strategy reduces variety to 3-4 basic lines for each product category will require less variety of raw material but in higher quantity in respect of each variety, but with a lower inventory average level in comparison with the present situation. This will bring down administration cost, overhead expenses and ordering costs. It will also give the company a higher negotiation power for better overall conditions, including delivery time, transportation cost, price, quality and budget.
• Lead time reduction from 14 to 6 weeks for finished goods.
One of the strategy changes is to reduce the lead time from 14 to 6 weeks in order to keep up with the competition in the market. From SC this may be discussed with the vendors at the time of negotiation and