Seagate

Team Buzz |

Seagate Case |

MGT 6401 Supply Chain Management |

|

Zack Melda, Alex Frank, Darla Mitchell, John Shupe. |

10/22/2013 |

[Type the abstract of the document here. The abstract is typically a short summary of the contents of the document. Type the abstract of the document here. The abstract is typically a short summary of the contents of the document.] |

What is Seagate’s corporate strategy? Describe and evaluate how its operations and

processes support the corporate strategy. Critically evaluate Seagate’s product and

process development strategy, which calls for development in its respective

product/process center in the U.S. and then exporting the developed process to a site

in the Far-East for high-volume production.

In Q2 of 1997, Seagate’s corporate strategy was to produce two new high end products called “The Barracuda” and “The Cheetah” in Q1 of 1998. To hedge against demand uncertainty, $103 million in capital investments had been requested to increase capacity at two assembly facilities, and one joint test facility. Focus was being placed on expansion of production facilities into regions that have typically lower labor prices such as China, and Thailand in order to drive down production costs. Additionally, Seagate pushed using the vertical integration model to maintain stringent product quality, and reliability standards needed to compete in the market.

To support the corporate strategy, Seagate’s operations model was to create products that are made at a low production cost, and in a very high volume, to capitalize on the short product life cycle of disk drives. The two new products were planned to be in production only during Q1-Q4 of 1998. The capital investment of building production capacity was approximately $40 million for fixed costs such as design, and start-up of the new facilities, and the remaining $70 million was larger space required and tooling costs. With the new capacity, Seagate would be able to...