Halloran Metals Is a Regional Company Located in the Northeast U.S.

MANAGEMENT OF SERVICE AND MANUFACTURING

CASE STUDY  - 1  ( HALLORAN METALS)

Levent Kubilay

Halloran Metals is a regional company located in the northeast U.S.

In summary, company profile is as follows.

• Metal industry  ( steel and aluminum)
• The company has acquired in the last 36 years
• 7 warehouses  , metal facilities ( Lynn, Concord, Worcester, Woonsocket, Newburg, Binghamton, Wilkes- Barre )  and allied steel- aluminum facility (Lowell)
• More than 10,000 customers  (each warehouse specialized in a certain group of products.)
• Almost $170 million ( 2001 revenues)  on sales and $6 million on operating profit
• Organization chart  

Board of directors → Presedent → Vice presedent  ( finance )

                                        (Finance,IT,Accounting )

                                          →Vice presedent  (operations )

                                        7 Regional Manager

                                        (Sales M.,Controller, Purchasing,

operatians Superintendent )

Customers are divided by three categories, the ones that their purchases are more than $80,000, and the other ones that are between $20,000 and $80,000, and the small customers that placed orders with less than $10,000. Approximately 40% of total revenues are represented by small customers.

To maintain its promise of high service levels, the company offers overnight delivery and rarely turning down an order, no matter the size of the order. The company operates its own fleet truck where no more than two hours are driven from the warehouse to the customer. Also Halloran does not charge for special customers' requirements needed to modify the product. The 30% of company trucking is for transfers made by warehouses.

Halloran has a big competitor named Allied who has revenues of $180 million by selling 40% product categories less in the same region. Allied managed 3,000 customers and it focus in large-volume customers as well as full truckload quantities. In the last two years the company has invested more than $20 million in equipment to process the steel. Allied owns just one warehouse located near Lynn warehouse, but the difference is that Allied facility is six times larger than Halloran warehouses. Allied also operates its own fleet, but instead of delivering the product overnight, they have a 3 to 5 delivery time since the order is generated.