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Free «Rich-Con Steel Case Study» Essay Sample

When Marty Sawyer took over from her father as Rich-Con Steel president, she was well aware that the company was in need of a new information technology system. The company was founded in 1857 as a hardware wholesaler distributor. The entry into the market of hardware chain stores in the early 1950s saw the company’s business decline. This led to the liquidation of the company in 1958. After selling all the hardware stock, Sam's Sawyer, who was the company’s president, bought out the other shareholders and re-established Rich-Con Steel as a steel service provider. Through it service center, the company provided its consumers with steel sheets, pipes, beams, bars tubing and plates among other products. Their main customers were equipment manufacturers and fabricators, whom they supplied with processed steel, as well as cutting and bending steel products for them, if they required.

The company had an excellent reputation for their services and meeting their customers’ needs timely this enabled them to grow steadily. Rich-Con Steel also acquired a reputation for saving and spending money carefully through buying old serviceable equipment and machinery. Marty sawyer took over from her father in the mid 1990s by then the company had a turnover of over fifty million dollars and one hundred and forty employees. The company ran its inventory and accounting system using IBM technology bought in 1969 (MacAfee). Their outdated technology required them to cannibalize old computers since there were no spare parts in production for the outdated machines. Marty sawyer had joined the company in the 1980s and had worked in the marketing department. She was, therefore, familiar with the company’s outdated technology, and the need to implement a new IT system.



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Although the company’s technology was outdated, it was reliable since its development was during over time by the employees. Among the greatest problems that were being experienced from its use included, lack of spare parts for their outdated computers, since they were no longer in production. The system was also not entirely integrated into the company’s whole operations, as it was serving only the accounts and its inventory department. This meant that the rest of requiring the rest the company’s operations to be manually run. Therefore, a lot of paper work was required in order to process their clients’ orders slowing the company’s operation (MacAfee). The old system also lacked the capability to store data that are crucial in analyzing their clients’ needs and trends over time. Rich-Con Steel had also ignored the developments in new IT technology, meaning that they were left out in the modern conveniences of technological developments. To address these needs, Marty sawyer shopped of an off-the-counter UNIX system and begun implementing the newly acquired system. Her decision to go for the off-the-counter UNIX system is the source of her current predicament (MacAfee). To begin with the new system seems to have failed and the employees circumventing the system by using the old operation methods. So her first problem can be said to be the failure of the new system gaining the staff support. This could be due to a number of factors that include inadequate training from the system providers, total failure of the system to employees’ attitudes toward new technology.

Marty Sawyer, therefore, faces several questions on the next step she should take. Firstly the new system has resulted in the breakdown in their supply chain management resulting in double orders and billings as well as failures to capture some of the orders and bills. Hence the company is losing money and clients for failing to meet their needs in time and errors, in their orders. Secondly the company’s inventory system is in chaos since the new system is unable to track the company’s stock. Her third question is whether to scrap the new technology after investing so much time and money in its implementation. Finally, Marty was spending more than a third of her time on the project implementation ignoring most of her other duties leading to the company failing. This implies that she was wondering what to do in order to have more time to address her other duties than she was already doing.


If Marty was to scrap the new IT system, the company would lose the resources invested in its implementation in terms of money and time. If she chooses this path, the company will meet its clients order in a reliable manner as in the past achieving temporarily satisfaction in the short run. This, however, ignores the need for the company to modify its IT system. Therefore, this solution is not recommended as it will only solve one of their problems leaving so many unsolved. In addition, the company would lose the resources invested in the new system destroying their reputation for saving and spending their money wisely. The old ways are also inefficient and time consuming with the capability of curtailing the company’s future growth. Her best option is to hire an IT specialist to help resolve the problems that the company faces with the implementation of the new system. The specialist should customize the system to meet the company needs and involve the employees in its implementation. This would solve several of their issues.

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First, by involving the employees in customization and implementation of the new system they would feel as a part of the new technology. This would help in resolving the opposing to the new system. They also now the company and its operation better than anyone else, thus provide invaluable input in the customization of the new system. This would help her save resources and free her time to concentrate on other aspects of the company’s operation.


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