CMC Steel South Carolina
Cayce, South Carolina

The Overview
CMC Steel South Carolina, formerly known as SMI Steel, is one of four steel minimills operated by Commercial Metals Company (CMC) of Dallas, Texas. Since 1915, CMC has manufactured, recycled, and marketed steel and metal products and related materials worldwide. The holding company is organized into five business segments: Domestic Mills, CMCZ (third largest steel producer in Poland), Fabrication, Recycling, and Marketing & Distribu-tion, of which CMC Steel South Carolina is part of the Domestic Mills business unit. CMC has more than 300 locations throughout the United States and is a Fortune 500 company selling and producing products nationally and overseas.

CMC Steel South Carolina became part of CMC in 1994 with the acquisition of Owen companies. The mill has been in operation since 1961. It currently has 365 employees, which does not include employees of downstream operations, which take CMC Steel South Carolina's steel products and turn them into end products for customers such as Departments of Transportation across the country. CMC's downstream operations (such as joist companies) account for 68 percent of the South Carolina plant's customer base; the rest is made up of forgers, other joist companies, producers of racks and trailers and other varied end products. One downstream operation produces 75 percent of the fence posts used in the country; CMC Steel's products are also used in construction projects such as the Cooper River Bridge in Charleston, SC, and the Pentagon building. CMC Steel South Carolina produces about 300 metal products for its varied customer base.

The Challenge
Dennis Malatek, CMC Steel South Carolina plant manager, says back in 2004 the facility made a conscious effort to become better at business planning and strategic implementation of the business plan. They were looking to get organized and take advantage of lean tools such as 5S and Kaizen events. The facility's leaders quickly realized that just training and tool implementation was not enough and that the facility needed a culture change. About that time, through inquiries with the S.C. Chamber of Commerce, CMC Steel leaders learned about the S.C. Manufacturing Extension Partnership (SCMEP) and decided it was the organization to help them create a plan and complete all the half-finished lean initiatives they had started over the years.

The Solution
SCMEP Manufacturing Specialist Tim Sinclair first performed a Competitiveness Review, or business and operations assessment, of the facility. He led the company on a site visit with another large South Carolina plant that had recently implemented some lean initiatives that resulted in improved organization and efficiency. "We were impressed with the organization we saw," Malatek of CMC Steel South Carolina, said. Sinclair then turned to Linda Prince, owner of Lumpkin & Associates, to create and implement a culture change that included business planning and more employee involvement.

Prince interviewed more than 100 hourly employees and conducted a management training class and brainstorming session. Then she mirrored the two events to point out inconsistencies in beliefs held by the workforce and management. They found employees did not perceive communication within the facility in the way managers thought they did, even though the company had always prided itself on implementing the "CMC Way," a method of communication based on mutual respect and dignity. But employees didn't think the communication was really two-way. Thus began the cultural transformation within the facility. From there, the team developed a strategic plan. The entire implementation took about 6 months; integration and updating the strategic plan added about another year to the timeframe.

The Impact
The work crews had never been given the opportunity to see the upstream (raw material) and downstream (end product) operations of CMC Steel South Carolina, so Malatek said they loaded everyone on a bus and took a tour of all the facilities. He said it increased the number of employees who expressed appreciation for their current jobs and renewed a focus on quality since they could see the results of poor workmanship on downstream operations. Increased ownership as well as better interaction among all crews resulted from this trip.

Another problem was solved as a result of this project implementation. CMC Steel Alabama is only five hours away, so there was a great duplication of sales territories between the two facilities. A reduction of the outside sales force by two employees (no one lost a job, as one retired and one was relocated to another position) deleted that duplication and saved the companies money. In addition, the sales and marketing staffs were able to consolidate their two call centers into one and reduce the inside sales force from 12 employees to seven employees.

Other savings include: decreased overtime costs to the tune of 5 percent (down to 10 percent from 15 percent), and a new product focus that caused the plant to drop production of some products and focus on others to increase the bottom line. Malatek says they also learned to troubleshoot problems faster on the shop floor.

This company is truly a transformational customer of SCMEP and has successfully implemented a culture change that has positively impacted the bottom line.