Essay on Usx Case Study

1536 Words Aug 3rd, 2015 7 Pages
OPS 660 Operations, Logistics, And Production
Dr. Frederick Chen
Grace, T., Hoffman, V., Jafuneh, E., Nieto, C.
2/238/15
USX Case Study

Should Kappmeyer sign the proposal and why?
Our recommendation after reviewing the case study and gaining a basic understanding of disruptive technologies and how they impact the steel industry is that Kappmeyer should not sign the proposal. The reason we feel USS should not sign the proposal is because by doing so they would be associating themselves with a business model and technology that is fading. On the surface it appears that signing the proposal is a good idea, however, it does not have long term sustainability, because they are only considering their current customers and not taking into
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To be fair, we must answer this question as if we were “in the moment”. We have to examine these questions as if the USS team only knew what they studied and examined prior to making their recommendation to sign the proposal.
USS engineering team considered the configuration/capital cost issue because this information would be more reliable than operating costs or product quality. The team quickly ascertained, along with the vendors, that adapting CSP to the needs of the USS’s existing customer base along with contractual obligations and constraints imposed by the Mon Valley facilities would be difficult.
The first difficulty that USS would face is the ability to meet the capacity demand, as their demand was four times greater than that of Nucor and “would be a headache beyond comprehension” according to one engineer.
The second issue encountered was the 10 mile distance between the two plants needed, E.T. and Irvin Mills at Mon Valley. There was multiple ideas presented as solutions and none were ruled out from being examined. As Moore states, “we tried very hard to make one of these thin-slab casting scenarios work”. The capacity demand was too great for any of the options conceptualized and examined. Unfortunately, as the HBS Case study presents, the site specific (Mon Valley) considerations seemed to dominate whatever the inherent economics of the new CSP might prove to be. It is important to remember that USS was obligated by a labor contract to

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