Case Study: Steel Inc

561 Words3 Pages
Case Study: Steel Inc. Analysis According to the description and data offered to me, here comes out a brief analysis of this case. The very serious problem for this company is how to lower inventory. (1) From the perspective of Specialty division, we should not deny that this one has made heavy contribution to the whole business, approximately bringing in 67% of the total revenue and the largest customers bringing in 10%. But unfortunately, it also has brought a lot to the cost, especially inventory cost. The big ones always buy a lot of different products and the demand variation is high. Up to 80% of the products have the c.v. more than 0.5. Obviously, those big customers are really vital to the business. If the company ceases to manufacture some products required by those big customers in order to decrease the inventory and cut off the cost, the company may lose contract with those important customers. Another problem confronting the company is that some medium and small-sized customers complained that there are insufficient products to be shipped. So, the dilemma comes out. The company has big inventory stored, meanwhile some customers always complains about the lack of products. One major reason is that the company always keeps the not-updated information and thus the improper inventory. Although the company holds a lot of inventory, too many of them are not needed while just few are needed by customers. In addition, I can see that Specialty relies on one-time production and many products are manufactured in the same plant and in rotating sequence. Three plants manufacture six product lines and products are manufactured in a single plant. Besides, only one network is used to distribute the products. This is another reason which causes the problematic issue. Also, the computer system the company employed is not quite suitable. (2) From the perspective of

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