Seagate case
About Seagate Technologies Seagate Technologies was incorporated in 1979 at Scotts Valley in California. The revenue of the company in 1997 was $8. 9 billion. Seagate is into the business of designing, manufacturing and marketing Hard Disk Drives used in various kinds of computers. It employed 111,000 persons worldwide out of which 93,000 were located in Far East. Disk Drive Technology Rigid disk drives are needed in a computer to store large volumes of data which can be accessed faster than an optical drive at a lower cost per megabyte. Rigid disk drive performance is measured by four parameters.
Market Segmentation based on application for Disk Drive Market Personal Computer Market In personal computer, Seagate had memory size ranging of 810MB to 1. 7GB with seek time of 12. 5 msec to 10. 5 msec. Smaller form factor disks (1. 8 inch to 2. 5 inch) were used for smaller devices like notebooks, mobile and ultra-portable computers. Workstation Systems These are high performance microcomputers, technical workstations and servers. The disk drive capacity was typically in the range of 2GB with a rotation speed of 7200 rpm to 10000 rpm. Server/Multi-user Systems
There are large systems including supercomputers and mainframes. They are used for business management systems, parallel processing and other application including intensive data manipulation. The memory capacity of the rigid disk used was 4GB with rotation speed of 5400 rpm to 10000 rpm. Product Portfolio of Seagate Technologies Seagate had five lines of disk drive products namely Marathon, Medalist, Barracuda, Cheetah and Elite. The specification of the product range is given below. The important competitors of Seagate include Quantum, Western Digital, IBM, Toshiba, NEC and Fujitsu.
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Another challenge in rigid disk drive industry is the rapid drop in prices of hard drives. The depreciation stands at 40% per year from 1980-1995. Hence one model of hard drive sells only for 4-6 quarters. Manufacturing Strategy and Process The manufacturing process of a rigid disk drive involves following steps: Fig 2: Manufacturing Process of Rigid disk drive at Seagate The final assembly plants are located in: Singapore, Thailand, Malaysia, China, Ireland, Minnesota and Oklahoma. The sub-assembly plants are located in Singapore, Malaysia, Thailand, Minnesota, California, Northern Ireland, Indonesia, Mexico, China and Scotland.
Seagate wishes to conduct an exercise called Capacity Resource Planning (CRP) for its two new models namely Barracuda and Cheetah. Capital investments are a result of CRP. CRP intermeshes with the production planning process. In the sales-plan driven planning, Seagate consolidates demand forecasts of monthly worldwide demand for each individual product. This forecast captures the demand uncertainty by a probability distribution over likely demand scenarios. In the current problem, the Total Demand for two new products forecasted is 600,000 units. The two products are substitutes of each other hence error estimate is about 100,000 units.
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