Reference no: EM13981

Nucor Corporation- Producing Quality Steel by Stressing Sound Management Practices

Nucor Corporation, headquartered in Charlotte, North Carolina, is the largest manufacturer of steel and steel products in the United States. The company received a great deal of attention because of its impressive performance in an industry plagued by a multiple of problems, especially in recent years. Si8nce the 1970's, Nucor pioneered the minimill concept, which is a method of making steel by melting scrap metal in electric arc furnaces at a fraction of the cost of conventional steelmaking. Nucor is admired for its quality products, its state-of-the-art manufacturing processes, and its industry- leading productivity ratio.

Although the company has recently made key acquisitions, and has modern facilities and equipment, competitors that have the same level of technology do not fare as well. What Nucor does have that is unique is a set of sound management principles and a somewhat novel approach to employee relations. Although Nocur is a $4.8-billion-per-year company, there are only four management layers between the CEO and frontline employees, and the general mangers on the plant floor make the day-to-day decisions. Rank-and-file employees are involved in devising methods to improve operations. The company has a very egalitarian culture. There are no company cars, company planes, assigned parking spaces, hunting lodges, and or other indication of status. All the employees wear the same color hard hat (with the exception of maintenance workers and visitors, who must be easily recognizable in case of an emergency), have the same group insurance program, have the same holidays, and have the same vacation plan.

There are other areas in which Nucor is distinct. The company has a well-developed employee incentive plan that aligns the interests of the employees with the interest of the firm. The typical mill worker at Nucor receives a base pay that is slightly below the industry standard, but the firm's bonus plan is very generous when the company is doing well. Two distinctive features of Nucor's bonus system are that it is all written down and is totally objective based on firm performance criteria. There is no subjectivity involved. If the firm reaches certain performance level, a bonus will be paid, period. With bonus figured in, Nucor employees typically lead the steel industry in terms of average pay. Yet the company's total cost per ton of steel produced is lower than that of other integrated producers.

Question based on Case Study

1. Analyze the key reasons why Nucor is well-known for its production of quality steels.

2. Comment on how Nucor's management practices affect its ability to produce high-quality products.

3. Justify how Nucor's human resource practices affect product quality.

Report Outline:

1. Introduction

1.1 Introduction to quality and management and production strategies that affects quality
1.2 Introduction to Nucor Corporation

2. Content

2.1 How Nucor's management practices affect its ability to produce high-quality products
2.2 How Nucor's human resource practices affect product quality
2.3 How has the success of Nucor's policies and structure affected the thinking and behavior of other organizations and what are the general lessons that can be more widely applied.

3. Conclusion