ABC STEEL COMPANY CASE ANALYSIS

VIEWPOINT

  Robert Cruz, newly appointed Shop Manager of ABC Steel Company

TIME CONTEXT

  Present

I. PROBLEM STATEMENT

How can ABC Steel Company achieve timely production and delivery of their products?

II. STATEMENT OF THE OBJECTIVE

 To improve the organizational design of the company which will facilitate the
optimization of the organization’s resources.
 To provide a work environment that is conducive to generating the best from its
people as it optimizes its organization resources to the fullest.
 To continuously improve the work process in order to maintain competitive in the
industry.
 To increase company’s profitability by avoiding payment of penalty charges.
 To avoid reputational and financial losses.

III. AREAS OF CONSIDERATION

ABC Steel Company was one of the country’s largest producers of fabricated steel
products. The company fabricated and installed storage tanks, mine and cane car bodies, dump
bodies, boats and many types of structural steel

  Its success is hinged on its ability to address the issues and challenges pointed out in the
SWOT analysis and Industry analysis shown below.
 SWOT Analysis:

Strength

 Strong market position as one of the country’s largest producers of fabricated steel
products. 
 Established brand name – prided as top producer of top-quality products

 Weaknesses

 Ineffective systems and processes

 Culture do not support the organization strategy
 Low engagement of people
 No accountability
 Poor working habits and no personnel policies
 No succession planning of personnel
 No personnel competency assessment
 No quality control and procedure
 No coordination with other department on costing
 Poor planning

Opportunities

 Market Expansion
 Alliances with complementary businesses/companies
 High demand for the fabricated steel products.
 Customers prefer companies which offer top quality products.

Threats

 Possible bankruptcy
 Potential lawsuit
 Loss of customers due to negative image
 Competitors will outdo their performance
 Loss of customer due to unmet obligation
 Financial loss due to payment of penalty charges on the non-fulfillment of contract
delivery date
 Reputational risk
IV. ASSUMPTIONS

The machines and other equipment used in the fabrication of steel products are in good
condition and advanced.

Mr. Robert Cruz was asked by the Top Management to come up with courses of action
to solve the company’s problem on production backlogs.

V. ALTERNATIVE COURSES OF ACTION

ACA 1. Establishment of a reward system for the management and subordinates.

Advantages:

Disadvantages:

ACA 2. Provision of supervisory trainings to the supervisors and lead men, and skills trainings
to the workers.

Advantages:

 Effective implementation of company policies.

 Supervisors and lead men will know how to handle resistance and discipline problems
involving the workers.
 Supervisors and lead men will learn how to properly plan, delegate tasks and exercise
their authority.
 Increase in the number of skilled workers which will help the company achieve a timely
production and delivery of products.
 Decrease in the number of production backlogs due to having efficient workers.
 Foster interest and confidence in the conduct of their tasks due to the knowledge
acquired.
 Increase the workers’ work satisfaction due to the improvement of their skills.

Disadvantages:

 It will incur additional costs to the company.

 Some of the supervisors and lead men are not open to change and new practices.
 Some of the workers may not be interested to learn new skills.
 The skilled workers may need to do overtime to cover the tasks of the workers who will
undergo the skills trainings.
 

ACA 3. Continual work process improvement

Advantages:

 Directed towards the accomplishment of organization’s goal and

 Customer’s expectation
 Reduced costs
 Increase product quality and work efficiency
 No wasted efforts from the company as well with employees
 Proper coordination with others department

Disadvantages:

 Incremental improvement

Continual improvement is an incremental process where you must take a small step as per the
set assumptions. Sometimes the defined objectives cause more harm the good and you need to
shatter the existing mold and try something different.

 Stifled innovation

The disadvantage of continual improvement is that it can result in missing opportunities and
stifling the creativity of the staff.

 Inadequate implementation

Sometimes objectives are not communicated properly, and it results in an inadequate

implementation that causes more harm than good.

VI. DECISION MATRIX

CRITERIA/ ACA   ACA 1   ACA 2   ACA 3

Effectiveness 3 3 3

Efficiency 1 2 3
Easy to 2 3 3
Implement

Total 6 8 9

Highly-3

Average– 2

Low- 1

VII. PLAN OF ACTION

Strategy/Activity Objective Person/ Time Budget

Department Frame
Involved

1. Creation of highly - To fill in positions that Board of 1 Month Forty

specialized Change requires competent and Directors of Thousand
Management Team skilled workers the Company Dollars
specialized to conduct
   
change management
System and (P40k)
Method

2. Systems and Method -To conduct root cause Senior Officer 6 Months Six
Team to conduct product analysis on the or Team Hundred
assessment, research, production problem and Leader and Thousand
market survey, industry make recommendation Members of Pesos
benchmarking and come on process the R&D Team
 
up with various improvement
proposals on (P600K)
 
enhancement on
production process
3. Personnel Training or - To enhance employee All 1 Year Twenty
Refresher Course commitment and Department Thousand
engagement and Human Pesos
Resource
- To enhance  
Department
employee’s productivity
(P120K)
- To minimize
dysfunctional behavior

- To disseminate and
proper monitoring on
the implementation of
the company policy

- To recommend
detailed job description
and accountability

4. Personnel - To help identify MANCOM and 1 week Ten

Competency Assessment employee’s suitability to Board of after Thousand
a given role. It helps Director BOD Pesos
measure an employee’s Approval proposal
 
skills, knowledge and
   
performance against (P10K)
pre-defined benchmarks Human  
or job requirements Resource
1 Year
Department
-
 

5. Succession Planning -To help ensure business MANCOM and 1 Year One
continuity and Board of Hundred
performance, Director Thousand
particularly during times Approval Pesos
of shifting of leadership
   
and change.   (P100K)

Human
Resource
Department