Abc Steel Case Analysis

In: Business and Management

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ABC STEEL COMPANY

Robert Cruz, newly appointed Shop Manager of ABC Steel Company, was making his way through the plant back to his office. He had just reviewed the company’s most recent operating statistics with his boss, Rudyard de los Santos, Operations Manager. The statistics were shocking: ABC Company’s production backlog had reached such proportions that top management decided not to accept any further business. The company was paying penalties of P50, 000.00 a day due to non-fulfillment of contract delivery dates.

ABC 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. As shown in the organization chart (Exhibit 1), fabrication and installation activities were organized as independent activities.

Robert Cruz had recently been promoted from Quality Control Supervisor to Shop Manager (see Exhibit 1). Twenty-nine years old, Robert had worked for ABC Company for the past 2 years. He had previously worked as a sheet metal worker and as an instructor at a United States naval base in Subic. Robert held an engineering degree from a local university.

Plagued by an ever-increasing production backlog, ABC Company had placed Robert in charge of all shop operations. There were 200 workers in the shop reporting directly to leadmen who, in turn, reported to Bay supervisors.1There were five Bay supervisors reporting to Robert. Before Robert’s appointment, Jim Fuentes, 45, was in charge of the shop. It was decided to transfer him to the position of Field Manager. (This position had formerly been a part of Rudyard’s responsibility.)

Before, he and Mr. de los Santos had reviewed the ABC Company’s performance. Robert had isolated a number of critical problem areas in the fabrication shop. Production…...

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