Gulf Metal States A. Situational Analysis

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GULF STATES METALS, INC. CASE STUDY
1)Gulf States Metal, Inc. Company is engaging in Nickel refining and also produces copper, cobalt, and ammonia sulfate. Its parent comp any is International Metals Inc. GSM created before 10 years by IMI and GSM has been in operation now for 8 years. IMI expected GSM to lose money the first 2 years operation after that it was expected to be highly profitable. In fact GSM has not shown a profit, losing $1million last year. This loses because of variety of factors and demand decrease for Nickel and Copper, the condition of equipment and labor problems. Another problem is price of substitute product is less. As they have done 20 years contract so as per terms current price for Nickel and Copper the cost of raw material makes it very difficult to show a profit. The plant is operated twenty-four hours a day, seven days a week. Process is monitored through the reading Gauges & the analysis of samples testing. Process control department is responsible for making adjustment in the process ensure quality and flow. Building & equipment are old and corroded. Atmosphere is not proper. Employees are not use safety equipment. Operator’s behaviors are not proper. Plant manager promoted to GM. IMI suggested for OD project at GSM. There is a poor management of former GM. Future of the plant depend upon new GM. IMI expect immediate Results. GM met some consultants for OD Project. Also no one has had any training in management. Top plant managers are highly autocratic. Major problem is management style of top plant managers. Plant could be more productive if positions matched authority and responsibility. Also maintenance is poor. Cost of Material is too high. Middle manager & supervisor are incapable or unwilling for work. People are not doing their job. Supervisor can't be trusted for decision-making. Equipment is a problem. Director of engineering could not maintain his staff. Supervisor is totally intimidated by manager & protecting themselves rather than correcting problem. They have plenty of technical expertise but not utilized. The management was ignoring the resources they have in the production supervisors. The reason of equipment breakdown is unwillingness of operation to allow adequate maintenance of equipment. Middle managers and Supervisors are not allowed to make decisions. They never have given opportunity to contribute although they're well trained and experienced. Management does not communicate. They need to shut down for regular maintenance. They don’t have right part of the right tool. There is a lack of trust. Top plant management thinks that supervisors cannot be trusted to make decisions. Maintenance managers and super-visors don’t trust management. The maintenance manager and supervisors don’t provide the maintenance cost regularly. The production supervisor is closer to the operation than they are to their bosses. The production operators are so angry at management (damage the equipment or don’t report problems until they cause shutdown) The issues in this company are at all levels, from the machine operators to the General Manager. Some of the issues were controllable and others were out of GSM’s hands. One of the uncontrollable issues was the significant change in the market price of the metals being produced at this plant, due to the increased production of an inexpensive substitute. GSM is locked into a 20 year contract in which they have only served 9 years. One of the controllable factors was the company suffers from the lack of effective trust and communication between departments and managerial levels. Top management makes close to all of the decisions and relies on the trickledown effect, and in some cases that information skips a whole level of command. The company is lack trust and communication, therefore management is constantly playing catch up and is not allowed to be proactive. Also, the plants materials and machines are outdated and high...
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