MRB2233

Case 2
CHAPARRAL STEEL: ACHIEVING HIGH QUALITY
THROUGH A COMMITMENT TO BOTH EXTERNAL AND
INTERNAL CUSTOMERS

PREPARED BY:
FAZARIZUL HASHIDI BIN MOHD PAUZI
MUHAMMAD ABD HAFIZ BIN JAFAR
RAFEI DARAJAT BIN MD MUSTAHAR
AHMAD AKMAL MOHD IDRIS
KOAY TZE HOW
CHAPARRAL STEEL - Background

Founded in 1973.
Located near Dallas, Texas.
Steel minimill producing a variety of steel products by recycling scrap steel.
Sell to a diverse group of industries, including construction, railroad, defence,
mobile homes, and appliances.
Production very cost effective.
Awarded the Japanese Industrial Standard Certification on its general structural
steel product, first outside Japan.
The only one steel company of its type to be certified by the American
Institute of Mining, Metallurgical and Petroleum Engineers to manufacture its
products for nuclear applications.



CHAPARRAL STEEL Discussion
Q1: For a company like Chaparral Steel, why is a commitment to both its
internal and external customers necessary?

Chaparral Steel main business is producing a variety of steel products by recycling
scrap steel
To stay creative and innovative
To achieved impressive results via communication and engagement.
Committed to internal and external customer are the key factors enable Chaparral
Steel to deliver excellent result to its client and position it as the leader in steel
technology where it acts fast to fulfill different client expectation as well as
requirement.




CHAPARRAL STEEL Discussion
Internal Customer
Internal customer satisfaction is a component for quality improvement.
Satisfaction of internal customer can create a very good working environment as
well as enhancing colleagues bonding in the organization where they can work
together and helping each others to achieve company goals, teamwork a lot of time
actually deliver the result of 1+1 greater than 2.
If internal customer not satisfied, the relationship with external customer can be
worst.
Because they are the one who always interact directly to the external customer. The
internal customers reflect the basic elements of the company; it represents the inner
structure, the quality, the capability and carrying the reputation of the company in
front of external customer.




CHAPARRAL STEEL Discussion
External Customer
External customers give revenue
From a commitment from internal and external customer, a new idea
and manufacturing technique can be implementing very fast at the
factory.
how Chaparral Steel improves their external customers.
Conducts customer surveys
Send employees on site visit
Listen carefully to external customer comments




CHAPARRAL STEEL Discussion
Q2: As mentioned in the case, Chaparral periodically sends frontline
employees on trips to visit the manufacturing sites of the companys customers.
In your opinion, is this a justifiable expense? Why and why not?

Employee trips to manufacturing sites of Customers Company are
important:
To understand the customer nature of the business.
To get interaction with customer more efficiently
Can give a full description and advise the correct way to install their product to
customer at site.
To observe the customer manufacturing process by using Chaparrals products
and see how these product perform. From this observation, the employee can
innovate a new technology or solution to Chaparral Steel that can contribute
benefit to the company
It is huge benefit to Chaparral steel because they want to hear from client. This is
the key element that positions Chaparral steel at top edge of steel industry where a
lot of companies actually dont practice this.
The employees trip to the customer sites or companies are important to get know in
the details what customers want and what Chaparral need to improve. It is
justifiable expense and it can be part of research and development process.



CHAPARRAL STEEL Discussion
Q3: Compare Chaparrals employee commitment to your current
employer or a recent employer?

Fazarizul Hashidi; Business Development Manager at Celcom Axiata
Chaparrals employees are more committed with their jobs compare Celcom.
There is limitation to communicate within department or division and they not
share all the information within department at Celcom.
Chaparrals employee has a very good communication within division.
At Celcom, it is very difficult to get support from top management where
employees dont have right to voice out their opinion to improve the department
work quality.
Chaparral Steel gives their employee to interact directly to the customer and
vendor.



CHAPARRAL STEEL Discussion
Continue

Hafiz Jafar; Business Development Manager at Puncak Semangat
Puncak Semangat has a culture that is quite similar with Chaparral Steel employees.
Communication is very important at Puncak Semangat.
Each Puncak Semangat subsidaries has their own expertise, therefore sharing
information; knowledge as well as skills becomes integral part of success in Puncak
Semangat.
Each employee also are encourage to further studies or joining any courses that can
improve the level of knowledge as well as skills.
Employee get an opportunity to voice out our opinion or comments.



CHAPARRAL STEEL Discussion
Continue

Rafei Darajat; Engineer at Perodua
Perodua culture has much similarity with Chaparrals employee.
Perodua really focus on customer satisfaction.
Each employee is encouraged to give ideas on how to improve our daily job
and thus it results to efficient working condition.
Perodua are encourage to perform 5S (Sorting, Setting in order, Systematic
cleaning, Standardize, and Service) all the time.
Internally, Perodua has developed its employee parallel with the organization as
a whole.
Perodua HR department has played its own role to cater the needs and demands
of employees such as giving appropriate training and knowledge, competitive
salary and benefits, as well as give fair appraisal and bonus at each end of year.
Perodua believes by that the growth of the organization rely on the quality of
employees.




CHAPARRAL STEEL Discussion
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Ahmad Akmal; Librarian at UiTM
At Perpustakaan Dato Jaafar Hassan, UiTM Perlis the two things which crucial is
external customer and internal customer which is as a fact, quite similar to
Chaparral Steel.
External customer is the most important customer where the customer here is the
main purpose why the library existed.
The staff here is the one who make things happens which to serve the customer
better, internal staff need to give their commitment in order to provide satisfying
service for the external customer.
The main problem at this library is communication breakdown.
Staff recognition, for example giving them award or place them in very important
position, will change the behavioral.





CHAPARRAL STEEL Discussion
Continue

Koay Tze How; Mechanical Engineer at Sinclair Knight Merz Consulting
The quality commitment and employee commitment practiced by Chaparral definitely
placed at high benchmark among the same industry and also can be a reference of study
by other industry.
Sinclair Knight Merz very committed to external customer as well as internal customer.
As a consulting firm, customer is the only source of income, but instead of working for
client.
Sinclair Knight Merz emphasizes on partnering with client and achieves outstanding
client success.
Sinclair Knight Merz committed to quality and timely management as these are the
fundamental to build a trust with client.
Sinclair Knight Merz always works together and establishes a long term partnership
with its client to strike the goals.
Employees are the only asset of a consulting firm.
Sinclair Knight Merz quite emphasizes on employee commitments.




The End