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Case study Stermon Mills case Essay

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What recommendation would you make to Mr. Kiefner? On what basis would you try to persuade him that your proposal is best for Stermon Mills?
From my analysis it emerged that the best option for Stermon Mills Inc. is the Option 2, which is moving machine #4 to a one week cycle and run through the existing grades every week instead of every two weeks.
The main reason that should convince Mr. Kiefner to look at reducing the cycle time is due to a customer requirement. Elly Ryesham, from the Sales Department, realized a straw poll of the sales force to understand what the most important things are for their customers. I have analyzed those results (see Exhibit 1) and converted the A,B,C… grades to numbers (A+= 4.33, A=4, A-=3.66 and so on
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There are two main potential issues with this approach. By reducing production lead times a company would likely increase manufacturing costs, but this increase should be leveraged by the increase in demand. The other issue would be the drop of the utilization rate by ten percent using this method. The key would be training the staff to implement faster change-times, which is not an impossible achievement.
Due to this last potential issue, the ideal strategy that Stermon should adopt would be a combination of Option 2 (One cycle week) and Option 4 (Labor multi skilling). The Option 4 would definitively improve the effectiveness of the labor in the plant, and it would benefit the change over time reducing it. However, if we look at Saugoe’s notes about the combination of improvement plans we can appreciate that adopting Options 2 and 4 at the same time might cause a lot of discontent if people were asked to change over faster as well as performing multiple functions. Therefore we believe that going with option 2 alone is the best solution to Stermon’s problems.
Option 1, doing a much broader range of basic weights would certainly satisfy those customers who value the customization and tailoring. However, the survey of sales force tells us that this requirement is not the top priority for Stermon at the moment, being after the responsiveness in delivery, a broader product line and having helpful and flexible sales people. Moreover,
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