Armco Inc Midwestern Steel Division

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Armco History and Performance Measures Armco, Inc. produced stainless, electrical, carbon steels and steel products. Armco, Inc., along with the help of other companies Armco, “produced coated, high strength and low-carbon flat rolled steel and oil field machinery and equipment” (Merchant & Van der Stede, 2012). In 1990, Armco was the sixth largest steel manufacturer in the United States. Armco’s Midwestern Steel division generated $550 million dollars in sales in 1990. Within Armco, the Kansas City Works division was their largest entity. It accounted for approximately $250 million in sales. Within the last decade, along with other steel producing companies, business within the Kansas City Works division began to decline.…show more content…
In addition, reports were generated the 15th day following each month end, therefore, providing outdated information to management. Midwestern Steel Division: Old System Praises The Midwestern Steel Division operation managers liked the old system, as they were familiar with it. Management understood the system and it was within their comfort zone. Management liked the Operating Statistics Reports because it provided them with detailed budget information and their objectives, in which they were required to meet each month. Implementation: New Performance Measurement System The new system is defined by 10 key performance measures, each of the performance measures is directly related to the specific areas and jobs of the employees. Although, out of the 10 performance measures that were defined, the maintenance performance measures were not clearly defined. The maintenance performance measures should be addressed as they could assist in cutting costs and expenses. In addition to the new system, managers were no longer responsible for the costs incurred within their departments. Management was able to put the blame on the costs incurred by lower level employees. The new system was implemented very quickly without proper training; therefore, management at Armco felt there was necessary changes that should take place. The first change that should take place is in provide training to managers. Training needs to be applied to all levels of management, this way

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