Hc Starck Case

MIT Leaders for Manufacturing Program

H. C. Starck, Inc.1

1. The Arrival Tom Carroll was a Fellow in MIT's Leaders for Manufacturing Program. On June 1st, 1999, after completing a difficult academic year, Tom arrived at H.C. Starck, Inc. to start on his six-month internship. He knew that his work would involve reducing lead times, but did not know any specifics. His first meeting was with Lee Sallade, Director of Operations. Figure 1 presents an abbreviated organizational chart for H.C. Starck. Lee explained that the sales group was pressuring him to reduce lead times ­ defined here as the time from when the customer places the order, until the product is shipped. The general feeling was that this metric was running at eight to fourteen weeks, mostly due to the long manufacturing time, but there was no hard data. The sales department felt that if lead-time could be reduced to three weeks, they would have a substantial advantage in the marketplace, and would realize incremental sales volume. Lee agreed that lead-time was important, but cautioned about focusing solely on lead-time, and not overall cycle time, which is the length of time it takes material to physically flow through the manufacturing process: We need to reduce cycle time as well as lead-time. Larry [the company president] got burned once on a lead-time reduction project. The distributors ended up taking all the benefit. You should talk to him about that. Lee explained that cycle time and inventory were important, but were difficult to influence since the company held such a high level of tantalum inventory:

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Copyright � 2000 Massachusetts Institute of Technology. This case was prepared by LFM Fellow Thomas J. Carroll under the direction of Professors Stephen C. Graves and Thomas W. Eagar as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. The case is based on the author’s LFM internship at the H. C. Starck,...