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Massachusetts Institute of Technology
This case was prepared by research assistant David
Kletter under the direction of Professor Stephen C.
Graves as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation.
Steel Works, Inc.
Gary Lemming sat in his new corner office and tapped his pencil on the desk. Lemming had just been named head of Steel Works, Inc.’s new centralized logistics group. After a decade of experience implementing MRP
(Materials Requirements Planning) systems throughout the company’s manufacturing facilities, Lemming was confident he could handle the job. Until this morning.
“Our inventory levels are ridiculous!” barked Jean
Du Blanc, the company’s Chief Financial Officer. “Our customer service is the worst in the industry, and getting worse,” grumbled Kirk Callow, the CEO. Lemming started to explain, “You see, I’ve already set up a team to look at all of that. . .” But before he could finish, Callow stood up.
“Sales are down 30% and expenses are up 25%. Our best customers are calling me and telling me they’re going to our competitors, and at the rate we’re losing market share we won’t be in business in a year. I don’t want to hear about teams, I want you back in here in a week telling me how you’re going to fix this thing.”
Lemming looked over the list of people he’d asked to meet with him this week. He shook his head–– how do I lower expenses and improve performance? How will I ever find the right answer?
Copyright © 1996 Massachusetts Institute of Technology.
The company, people, data and events depicted herein are entirely fictitious. Any resemblance to actual people, businesses or