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System of U.S. Steel - Case Study Example

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The paper 'System of U.S. Steel' focuses on USS identified that in order to get back to profitability it needed to increase its market share which required lowered production costs and centralized management of its business and factories. Its major problems were evident in its order taking process…
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System of U.S. Steel
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Download file to see previous pages The orders were manual, imprecise and filled with errors; there was no coherence among the different processors as they had their own tracking and order system. Therefore USS was unable to follow each order as it was processed and delivered. The communication system employed between the different processors was a dialup system meaning that data processing wasted a lot of time, invariably forcing the company to hold large inventory, increasing its production cost. All such problems made USS uncompetitive in the face of other producers such as POSCO, which was recently set up with the latest technologies.
To fix these problems USS took rapid steps to improve their production system. First of all, they provided their customers to place their order online specifying the product, quantity, price, composition, size, thickness, and even delivery date for their orders. The software was developed so as to allow the customer to be able to see the cost as well as the delivery dates of their order, to allow them to plan accordingly for their business. It also allowed for messages from different processors to be translated much more quickly and more efficiently. USS also connected DecisionExpress software from LiveCapital for customers which reduced its uncollectible debts. To further improve the accuracy of the order USS incorporated several other soft wares such as order fulfillment and later i2 Technologies. They also introduced soft wares such as iTrac to keep track of their shipments and Mechanical Item Generation System to regenerate orders for repeat customers. USS also set up a subsidiary USS Engineers and Consultants, to sell these soft wares to assist other companies. To maintain its competitive advantage they only provide soft wares which are a version older than their current software (Bratislava, 2003).
Results and Business benefits
In 1996, when USS faced a disastrous situation of losing Ford Motor, USS identified that in the face of future competition computerization of the production system was a necessity. This direction allowed USS to be more efficient and more profitable. After the implementation of the software system, USS required 3 work hours to produce a ton of steel, as compared to 4 hours in Germany and 4.8 hours in POSCO. Hence, USS was able to greatly benefit from strong economic conditions by supplying steel to the United States, China, and other countries (Michael Erman - 2007).
The progress of U.S. Steel depends on the world demand for their products i.e. steel. As witnessed from the worldwide economic shock, demand for steel and other essential construction material has plummeted. The widespread closure of factories has significantly halted further investments, resulting in drastic drops of steel prices. USS has invested a great sum of financial capital in refining their production cycle but in current times it will be very difficult to gain substantial profit margins. USS will have to increase their supply channels to more countries in order to sustain their current sales return. This will require further investments and costs in this current scenario but will return great dividends once the economic situation is rectified.  ...Download file to see next pagesRead More
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